Rose & Co., CPAs, has satisfactorily completed the audit of the financial statements of Dale, Booster &
Question:
Rose & Co., CPAs, has satisfactorily completed the audit of the financial statements of Dale, Booster \& Co., a partnership, for the year ended December 31, 20X1. The financial statements that were prepared on the entity's income tax (cash) basis include notes that indicate that the partnership was involved in continuing litigation of material amounts relating to alleged infringement of a competitor's patent. The amount of damages, if any, resulting from this litigation could not be determined at the time of completion of the engagement. The prior years' financial statements were not presented.
Required:
Prepare an auditors' unqualified special report on the financial statements of Dale, Booster & Co. Your report should include two "explanatory paragraphs": one to mention the basis of accounting used, and another to emphasize the matter of the pending litigation. Address your report to Dale, Booster & Co.
Step by Step Answer:
Principles Of Auditing And Other Assurance Services
ISBN: 9780072327267
13th Edition
Authors: Ray Whittington, Kurt Pany