What are the limitations in applying the GAAS of an opinion as to conformity of financial statements with GAAP? Indicate the general effects of its application on the wording of the opinion in the auditor's special report on the statements of each of the two following cases.

1. The financial statements of the \(X Y Z\) Market, a retail grocery operated as an individual proprietorship, are prepared on the basis of cash receipts and disbursements. These statements do not purport to present the financial position and results of operation of the company.

2. The financial statements of the Raintree County Hospital, a private nonprofit organization, are prepared in accordance with the principles and practices of uniform accounting prescribed by a national hospital association. These statements purport to present the financial position and results of operation of the hospital.