In short
A special purpose framework is a basis of accounting other than generally accepted accounting principles, such as the cash basis, the tax basis, a regulatory basis or a contractual basis.
Key takeaways
- The auditor's report includes an emphasis-of-matter paragraph alerting readers to the basis of accounting.
- Reports on regulatory or contractual bases may be restricted to specified users.
- The financial statements must adequately describe the framework and how it differs from generally accepted accounting principles.
Where it's tested
AUD: Audit Reports — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An auditor is unable to observe the physical inventory count or satisfy themselves through alternative procedures, and inventory represents 60% of total assets. What opinion is appropriate?