Section 1: 30–40%1E
Special Purpose Frameworks
Exam Insight
Special purpose frameworks (cash basis, tax basis, regulatory basis) are tested by asking you to identify what's different from GAAP and why that's acceptable. The AICPA's trap: candidates think 'compiled statements' means no disclosures required - but you must still disclose which framework was used. Also know that special purpose framework reports have restricted use - they're 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