FASB versus SEC Rules: How to Live with a Double Standard You are a CPA who audits both Privex, a privately owned parent company, and Publex, a publicly owned parent company. Assume that the SEC’s consolidation rules are slightly more stringent than the FASB’s consolidation rules as to (1) when consolidation is required and (2) what detailed disclosures are required.

Required 1 If Privex follows only the FASB consolidation rules, would you still be able to give an unquali¬
fied “clean” opinion on Privex’s financial statements?
2 If your answer was yes, how comfortable do you feel giving unqualified opinions using two dif¬
ferent reporting standards?
3 What do you think CPAs commonly do in such situations?