Section 1: 30–40%1E
Special Purpose Frameworks
Exam insight
Special purpose frameworks (cash basis, tax basis, regulatory basis) are tested by asking what differs from GAAP and why that's acceptable. The AICPA's trap: candidates think 'compiled statements' need no disclosures - but you must still disclose which framework was used. And note that some special purpose framework reports are restricted-use, not for general distribution.
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What AICPA wants you to know
- 1Define special purpose frameworks and list the four main types
- 2Distinguish GAAP from non-GAAP financial statements and when each is appropriate
- 3Describe how auditors report on special purpose framework financial statements
- 4Identify disclosure requirements unique to special purpose frameworks