True-A/False-B

There is no guidance found in the SSARS related to compilation and review engagements for OCBOA financial statements.

A basis of accounting that the reporting entity uses or expects to use to file its income tax return for the period covered by the financial statements is not considered a special purpose framework.

The major advantage of special purpose financial statements over GAAP-based statements is that they are generally less costly to prepare.

A modification to cash basis financial statements is generally considered to have substantial support when the modification is equivalent to the accrual basis of accounting and the modification is logical.

When modifications to cash-basis statements are so extensive that the statements are equivalent to accrual-basis statements, those statements should never be considered GAAP-basis financial statements.

The most common presentation alternative for nontaxable revenues and nondeductible expenses in tax-basis financial statements is as a disclosure item in the notes to the financial statements.

According to AU-C Section 800, an other-matter paragraph restricting the use of the auditors report must be issued when the basis used to prepare financial statements is a contractual basis of accounting.

The authoritative literature identifies specific captions (e.g., net income) for certain line items within a set of tax basis financial statements.

The standard audit report for cash basis financial statements includes an emphasis-of-matter paragraph alerting readers about the preparation in accordance with the special purpose framework.

A departure from a special purpose framework never results in a modification of an audit report.