Auditors issue several types of 'special audit reports.' Which of the following circumstances wouldnot require the issuance of a special audit report?
A) The auditor has been retained to audit only the current assets.
B) The auditor has been retained to review the internal control system, not the financial statements.
C) The client's financial statements are prepared using the accrual basis.
D) The client's financial statements are prepared using the cash basis.

Question

Quizplus · Accepted Answer

Special audit reports are issued for reasons other than the standard financial statement audit, such as audits of specific financial components (A), reviews of internal controls (B), or financial statements prepared on a basis other than generally accepted accounting principles, like the cash basis (D). The accrual basis (C) is a standard accounting method, so it would not require a special audit report.

Auditors Issue Several Types of 'Special Audit Reports