CPA Quiz: Engagement Acceptance And Terms
20 questions · exam conditions
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Engagement Acceptance And TermsQuestion 1 of 20

A CPA firm is considering an initial audit engagement for a publicly traded biotech company (an issuer) that recently received a whistleblower complaint alleging improper capitalization of research costs. Management wants the firm to begin work immediately but requests that the engagement letter not be shared with the audit committee. Under PCAOB standards and issuer governance expectations, how should the auditor respond regarding engagement terms and communications?

Agree to management's request because the engagement letter is a private contract and does not involve those charged with governance
Proceed only after confirming the audit committee's involvement in auditor appointment/oversight and ensuring the engagement terms are communicated appropriately to those charged with governance
Accept the engagement and plan to inform the audit committee after the auditor issues the report to avoid prejudicing the investigation
Perform the engagement under AICPA audit standards because whistleblower matters are outside PCAOB scope
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CPA Quiz

CPA Quiz: Engagement Acceptance And Terms

Practice Engagement Acceptance And Terms in CPA with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Engagement Acceptance And Terms, giving you a quick way to practice the rules, question types, and explanations that matter most for CPA.

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

A CPA firm is considering an initial audit engagement for a publicly traded biotech company (an issuer) that recently received a whistleblower complaint alleging improper capitalization of research costs. Management wants the firm to begin work immediately but requests that the engagement letter not be shared with the audit committee. Under PCAOB standards and issuer governance expectations, how should the auditor respond regarding engagement terms and communications?

  1. Agree to management's request because the engagement letter is a private contract and does not involve those charged with governance
  2. Proceed only after confirming the audit committee's involvement in auditor appointment/oversight and ensuring the engagement terms are communicated appropriately to those charged with governance (correct answer)
  3. Accept the engagement and plan to inform the audit committee after the auditor issues the report to avoid prejudicing the investigation
  4. Perform the engagement under AICPA audit standards because whistleblower matters are outside PCAOB scope
Explanation: For audits of issuers, PCAOB standards and SEC requirements mandate specific governance protocols, including audit committee oversight of the external auditor relationship and engagement terms. The critical fact is management's request to exclude the audit committee from engagement letter communications during an active whistleblower investigation, which raises significant red flags about governance and transparency. Answer B is correct because PCAOB AS 1301 requires the auditor to establish an understanding with the audit committee regarding the services to be performed, and proper governance requires audit committee involvement in auditor appointment and oversight - proceeding only after confirming appropriate audit committee engagement ensures compliance with issuer requirements. Answer A is incorrect because for issuers, the audit committee (not management alone) has statutory responsibility for auditor oversight, making their exclusion inappropriate and potentially indicative of management override concerns. Answer C is incorrect because delaying audit committee communication until after report issuance violates PCAOB requirements for timely communication and undermines the audit committee's oversight role. Answer D is incorrect because all audits of issuers must be performed under PCAOB standards, and whistleblower allegations fall squarely within the scope of required auditor considerations for fraud risk. The professional framework requires maintaining independence from management and ensuring appropriate governance involvement, particularly when red flags suggest potential management integrity issues or attempts to circumvent oversight.

Question 2

A CPA firm is preparing an engagement letter for an initial audit of a privately held franchisor (a nonissuer) that has complex revenue streams from franchise fees, royalties, and vendor rebates. Management requests that the engagement letter state the auditor is responsible for preparing the financial statements and maintaining the accounting records to "avoid confusion." How should the auditor respond when documenting engagement terms under AICPA auditing standards?

  1. Agree, because auditors may assume responsibility for bookkeeping as long as the engagement letter discloses it
  2. Agree, but add language that the auditor's opinion will be modified if errors are later identified in records the auditor maintained
  3. Decline to include that language and instead document management's responsibility for preparation and fair presentation of the financial statements and for internal control, while the auditor's responsibility is to express an opinion (correct answer)
  4. Include the language only if the audit is performed under PCAOB standards, which permit the auditor to maintain the client's accounting records
Explanation: AICPA auditing standards clearly delineate management and auditor responsibilities, with management retaining responsibility for financial statement preparation and internal control regardless of any assistance provided by the auditor. The critical fact is management's request to document that the auditor is responsible for preparing financial statements and maintaining accounting records, which fundamentally misrepresents the allocation of responsibilities under professional standards. Answer C is correct because AU-C 210 requires the engagement letter to clearly state that management is responsible for preparation and fair presentation of financial statements and for internal control, while the auditor's responsibility is to express an opinion - this cannot be altered by agreement and must be properly documented to avoid misunderstandings. Answer A is incorrect because even when auditors provide bookkeeping assistance to nonissuers, management retains ultimate responsibility for the financial statements and accounting records. Answer B is incorrect because the auditor cannot agree to modified opinions based on errors in records they maintained; management remains responsible regardless of who performs bookkeeping tasks. Answer D is incorrect because PCAOB standards actually have stricter independence rules that generally prohibit auditors from maintaining accounting records for audit clients. The professional framework requires maintaining clear boundaries between management and auditor responsibilities, ensuring that engagement documentation accurately reflects these roles regardless of practical assistance arrangements.

Question 3

A CPA firm agreed to perform a year-end audit of a privately held medical clinic (a nonissuer). Midway through planning, the clinic acquires a second location and begins billing through a new third-party platform, increasing risks related to revenue completeness and data access. Based on these changed circumstances, what modification to the engagement terms is most appropriate?

  1. Convert the audit to a compilation because the client's system change makes an audit impracticable
  2. Issue a revised engagement letter documenting the updated scope and timing, including the need for access to the billing platform reports and any planned use of specialists (correct answer)
  3. Continue under the original engagement letter because engagement terms cannot be changed once planning has begun
  4. Limit audit procedures to the original location only and disclose the scope limitation in a separate management letter
Explanation: When circumstances change significantly during an audit engagement, professional standards require reassessing and documenting revised engagement terms to ensure mutual understanding of the modified scope and responsibilities. The key facts are the mid-engagement acquisition of a second location and implementation of a new billing platform, both of which materially affect audit risk and required procedures. Answer B is correct because AU-C 210 requires the auditor to agree on revised terms when circumstances change significantly, and issuing a revised engagement letter properly documents the updated scope, timing, and any additional requirements such as specialist use or expanded data access. Answer A is incorrect because converting to a compilation due to increased complexity would be a disservice to users who need audited financial statements and represents an inappropriate response to manageable challenges. Answer C is incorrect because engagement terms can and should be modified when circumstances change materially - continuing under outdated terms creates misunderstandings and potential liability. Answer D is incorrect because artificially limiting scope to avoid updating engagement terms violates professional standards and would result in a scope limitation requiring opinion modification. The professional judgment framework emphasizes proactive communication and documentation when engagement circumstances change, ensuring all parties understand the implications for audit procedures, timing, and fees while maintaining audit quality.

Question 4

A prospective client is a nonissuer cryptocurrency trading business requesting an initial audit. The company operates in a rapidly changing regulatory environment and has significant risks around custody, valuation, and existence of digital assets. Management refuses to provide complete access to wallet addresses and third-party custody reports. Which factor is most critical when deciding to accept this engagement?

  1. Whether the auditor can rely on management's verbal assurances regarding digital asset existence to avoid obtaining third-party evidence
  2. Whether the firm can reasonably expect to obtain sufficient appropriate audit evidence and whether management's refusal indicates a potential integrity issue (correct answer)
  3. Whether the engagement letter includes a clause stating the auditor is not responsible for any valuation matters
  4. Whether the auditor can issue a compilation report instead of an audit opinion and still satisfy the client's request for an audit
Explanation: The concept tested is AU-C Section 210 on acceptance preconditions, emphasizing sufficient evidence and integrity. Key facts include the nonissuer crypto audit, regulatory risks, access refusals. Choice B is critical as refusals signal issues per AU-C 210. Choice A relies on assurances inadequately; choice C omits valuation; choice D suggests compilation unsuitably. Judgment assesses evidence expectations. Ethical practice declines if integrity or access is compromised.

Question 5

A nonissuer retailer initially engaged your firm for an audit of its financial statements. Midway through planning, management requests changing the engagement to a review to reduce costs, even though the statements will still be used to renew a large line of credit. The company has recently experienced declining margins and increased returns, raising risk of misstatement in revenue and inventory. Based on the provided facts, what modification to the engagement terms is necessary?

  1. Agree to the change and document it only in the audit file; an updated engagement letter is not needed for a lower level of assurance
  2. Decline the change unless there is a reasonable justification; if agreed, issue a revised engagement letter describing the new scope and limitations of a review (correct answer)
  3. Agree to the change because cost reduction is always a reasonable justification, and keep the original audit engagement letter in effect
  4. Agree to the change only if management provides a written representation that all fraud risks are immaterial
Explanation: The concept tested is AU-C Section 210 on modifying engagement terms, requiring reasonable justification for changes from audit to review and updated documentation to reflect new scope and ethics. Key facts are the nonissuer retailer's request to downgrade from audit to review for cost reasons, despite credit line needs and risks in revenue and inventory. Choice B is correct as it requires justification and a revised letter per AU-C 210, ensuring clarity on review limitations under AR-C 90. Choice A omits necessary updates, violating documentation standards; choice C assumes cost is always justified, ignoring AU-C 210's reasonableness requirement; choice D misrequires fraud representations irrelevant to changes. Professionals should assess change rationales against user needs and risks, documenting via revised letters. Ethical considerations include avoiding misleading users by clearly stating assurance levels in terms.

Question 6

Your firm is asked to accept an initial audit for a nonissuer distributor whose prior auditor resigned. The client has significant related-party transactions with entities owned by the founder and operates in a highly competitive market with tight liquidity. Management authorizes communication with the predecessor auditor. What communication is required with the predecessor auditor?

  1. Inquire about information that might bear on management integrity, disagreements with management, and the predecessor's understanding of reasons for the change in auditors (correct answer)
  2. Request the predecessor auditor's detailed audit documentation for the last three years, which must be provided under AICPA standards
  3. Ask the predecessor auditor to reissue the prior-year report under the successor's name to reduce first-year risk
  4. Limit inquiries to whether prior-year financial statements were materially misstated, because other matters are not relevant to acceptance
Explanation: The standard tested is AU-C Section 210, mandating predecessor auditor inquiries for initial audits to inform acceptance, focusing on integrity, disagreements, and change reasons ethically. Key facts involve the nonissuer distributor's initial audit, predecessor resignation, related-party risks, and authorized communication. Choice A is correct as it specifies required inquiries per AU-C 210 to assess risks. Choice B demands excessive documentation sharing, not required; choice C seeks improper reissuance; choice D limits inquiries too narrowly, missing key elements. Judgment requires integrating predecessor insights with client risks like related parties. Ethical practice involves thorough pre-acceptance due diligence to ensure objective audits.

Question 7

A nonissuer hospitality group requests an initial audit. The group has experienced frequent turnover in its accounting department and has multiple cash-intensive locations, increasing fraud risk. Management proposes that the engagement letter exclude any reference to management's responsibility to provide access to all information, citing "confidentiality." What should be included in an engagement letter for this client?

  1. A clause stating the auditor will rely solely on management-provided schedules and will not request supporting documentation
  2. Management's responsibility to provide the auditor with access to all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements (correct answer)
  3. A promise that audit procedures will be sufficient to detect all instances of employee theft at each location
  4. A requirement that the auditor perform a SOC 1 examination of each location's cash controls as part of the audit engagement
Explanation: The concept tested is AU-C Section 210, requiring engagement letters to outline management's responsibility for providing access to relevant information, upholding ethical transparency in audits. Key facts include the nonissuer group's initial audit, turnover, cash risks, and proposal to exclude access references for confidentiality. Choice B is correct as it mandates access per AU-C 210 for evidence gathering. Choice A relies improperly on unverified schedules; choice C promises unattainable fraud detection; choice D adds irrelevant SOC examinations. Professionals should insist on access clauses to address risks like fraud. Ethical judgment evaluates management restrictions as potential acceptance barriers.

Question 8

A prospective issuer client requests your firm to perform an initial audit and states it wants to also engage your firm to design and implement its financial reporting controls before year-end. The company operates in a regulated industry and has significant compliance risks. Which factor is most critical when deciding to accept this engagement?

  1. Whether the firm can provide both services, because designing controls for an issuer audit is always permitted if disclosed in the engagement letter
  2. Whether providing control design and implementation services would impair independence under PCAOB rules for an issuer audit (correct answer)
  3. Whether the client will agree to a lower audit fee in exchange for the additional services
  4. Whether management will sign a representation letter stating it is responsible for internal control, which eliminates independence concerns
Explanation: The standard tested is PCAOB AS 1001 and independence rules, prohibiting services impairing independence like control design for issuer audits. Key facts are the issuer's request for audit plus control implementation, with regulatory risks. Choice B is critical as such services impair independence per PCAOB ethics. Choice A misstates permissibility; choice C focuses on fees irrelevantly; choice D doesn't eliminate impairments. Framework assesses non-audit services for threats. Ethical judgment requires separating roles to maintain objectivity.

Question 9

A nonissuer client engaged your firm for an audit of its financial statements. After signing the engagement letter, the client acquires a foreign subsidiary operating in a high-inflation environment, increasing accounting complexity and risk. Based on the provided facts, what modification to the engagement terms is necessary?

  1. No modification is needed because engagement letters cannot be changed once signed; address the acquisition only in the audit planning memo
  2. Consider revising or reissuing the engagement letter to reflect significant changes in scope or responsibilities (such as use of component auditors or additional reporting), and obtain agreement from management (correct answer)
  3. Automatically convert the audit to a review because foreign operations increase audit risk
  4. Apply PCAOB standards for the remainder of the engagement because the company now has international operations
Explanation: The standard tested is AU-C Section 210 on revising terms for significant changes, requiring updated agreements for scope impacts. Key facts are the nonissuer's post-letter foreign acquisition, increasing complexity. Choice B is correct per AU-C 210, mandating revisions. Choice A omits updates; choice C converts unnecessarily; choice D misapplies PCAOB. Professionals reassess terms for changes. Ethical considerations include documenting expanded risks.

Question 10

A prospective client is an issuer planning an initial public offering and requests your firm to perform an initial audit of its financial statements. The company has complex revenue arrangements and significant stock-based compensation estimates, and it wants the report filed with the SEC. Which factor is most critical when deciding to accept this engagement?

  1. Whether the firm is registered with the PCAOB and can comply with PCAOB independence and auditing standards for an issuer audit (correct answer)
  2. Whether the firm can apply AICPA Statements on Standards for Accounting and Review Services to the engagement
  3. Whether the client will allow the auditor to omit substantially all disclosures to shorten the filing
  4. Whether the firm can issue a compilation report instead of an audit opinion to reduce liability
Explanation: The standard tested is PCAOB AS 2101 on audit engagement acceptance for issuers, emphasizing compliance with PCAOB standards, independence, and registration requirements. Key facts include the issuer's IPO plans, complex revenue and compensation, and SEC filing needs, demanding PCAOB expertise. Choice A is correct as PCAOB registration and compliance are prerequisites for issuer audits per AS 2101 and SEC rules. Choice B applies AICPA review standards incorrectly to audits; choice C omits disclosures not permitted without qualification; choice D suggests compilation, unsuitable for SEC audits. Judgment involves verifying firm capabilities against PCAOB requirements before acceptance. Ethical focus ensures issuer audits meet heightened public interest standards, considering risks like estimates.

Question 11

A CPA firm is considering accepting an initial review engagement for a nonissuer e-commerce company whose controller proposes paying the firm a success fee based on obtaining a lender's approval of a credit facility. The company has volatile sales and significant returns, and the lender will rely on the reviewed financial statements. Which factor is most critical to address before accepting the engagement?

  1. Whether the firm can reduce review procedures because the lender is sophisticated and can perform its own analysis
  2. Whether the engagement letter states that the accountant will not consider fraud in any manner during the review
  3. Whether the proposed fee arrangement creates an independence impairment that would preclude performing the review under AICPA standards (correct answer)
  4. Whether the firm obtains an internal control attestation report before issuing a review report
Explanation: Independence is a fundamental requirement for all attest services including reviews, and contingent fee arrangements tied to specific outcomes typically impair independence under AICPA standards. The critical fact is the proposed success fee contingent on lender approval, which creates a direct financial interest in a specific outcome of the reviewed financial statements. Answer C is correct because ET 1.510.001 prohibits contingent fees for attest services, and a success fee based on obtaining financing would impair independence, precluding the firm from performing the review - this must be resolved before accepting the engagement. Answer A is incorrect because review procedures cannot be reduced based on user sophistication; SSARS prescribes specific procedures that must be performed regardless of who uses the financial statements. Answer B is incorrect because while reviews have no responsibility to detect fraud, the engagement letter should not state the accountant will not consider fraud "in any manner" as this misrepresents the accountant's professional skepticism obligations. Answer D is incorrect because internal control attestation is not a prerequisite for performing a review engagement; reviews can be performed without any evaluation of internal control. The professional framework requires maintaining independence in both fact and appearance for all attest services, with fee arrangements being a critical consideration during engagement acceptance to avoid compromising professional objectivity.

Question 12

An auditor is documenting the terms for a new audit engagement with a nonissuer client that has never been audited before. The client's management is knowledgeable about business operations but has limited experience with the financial reporting and audit process.

In this situation, which of the following actions is most appropriate for the auditor to take when preparing the engagement letter?

  1. Include more detailed descriptions of the auditor's and management's responsibilities to reduce the risk of misunderstanding. (correct answer)
  2. Omit the section on fees and billing until the audit is substantially complete to avoid early disputes.
  3. State that because this is a first-time audit, the auditor cannot be responsible for detecting fraud.
  4. Require that management engage an external specialist to assist with financial statement preparation.
Explanation: When there is a risk of misunderstanding, especially with a new client inexperienced with audits, it is prudent for the auditor to make the terms in the engagement letter, particularly the respective responsibilities of management and the auditor, more detailed. Omitting fees (B) is inappropriate. Stating the auditor is not responsible for fraud (C) is a prohibited scope limitation, as the auditor always has responsibilities related to fraud under GAAS. Requiring a specialist (D) is a decision for management, not a term the auditor imposes.

Question 13

A CPA firm is engaged to perform an integrated audit for a new issuer client.

In addition to the standard terms for a financial statement audit, the engagement letter should include a statement regarding which of the following?

  1. The auditor's responsibility for reporting on the effectiveness of the client's internal control over financial reporting. (correct answer)
  2. A list of the key controls the auditor plans to test during the engagement.
  3. Management's agreement to provide a separate representation letter specifically for internal controls.
  4. The requirement for the engagement to be reviewed by the SEC before the report is issued.
Explanation: For an integrated audit of an issuer, conducted under PCAOB standards, the objective includes expressing an opinion on both the financial statements and the effectiveness of internal control over financial reporting (ICFR). The engagement letter must clearly state this expanded scope and the auditor's responsibilities related to ICFR. The other options are incorrect as they are either too detailed (B), part of a different communication (C), or factually incorrect (D).

Question 14

An auditor accepted an engagement to audit a nonissuer's financial statements and documented the terms in an engagement letter. Before the completion of the audit, the client requests a change in the engagement to a review. Which of the following would be the least justifiable reason for the auditor to agree to this change?

  1. A change in circumstances affecting the entity's requirement for an audit.
  2. A misunderstanding concerning the nature of an audit or the related service originally requested.
  3. A restriction on the scope of the audit, whether imposed by management or caused by circumstances.
  4. The client believes a review will be less expensive than the originally planned audit. (correct answer)
Explanation: While cost savings is a common motivation for clients, it is not, by itself, a reasonable basis for an auditor to agree to a change in engagement from an audit to a review. The auditor must consider the reasons for the request, especially if it appears the request is to avoid the discovery of errors or fraud. The other options (change in circumstances, a misunderstanding, or a scope limitation) are all considered reasonable bases for the auditor to consider the change.

Question 15

A CPA firm has been engaged to perform an audit of a local government entity in accordance with Government Auditing Standards (the Yellow Book).

The engagement letter for this audit should include a statement that the audit will include which of the following?

  1. Reporting on compliance and on internal control over financial reporting. (correct answer)
  2. An opinion on the entity's compliance with all laws and regulations.
  3. A guarantee that all instances of fraud and abuse will be detected.
  4. The specific funding sources from federal agencies that will be tested.
Explanation: Audits conducted under Government Auditing Standards have additional objectives beyond a standard financial statement audit. The engagement letter should describe this expanded scope, which includes developing and reporting on findings related to internal control over financial reporting and compliance with provisions of laws, regulations, contracts, or grant agreements that have a material effect on the financial statements.

Question 16

During the process of establishing the terms of an audit engagement, a potential nonissuer client's management refuses to include a statement in the engagement letter acknowledging its responsibility for the fair presentation of the financial statements. In this situation, the auditor should

  1. Accept the engagement, but issue a disclaimer of opinion.
  2. Accept the engagement, but document management's refusal in the workpapers.
  3. Refer the matter to the client's legal counsel for resolution.
  4. Decline the engagement. (correct answer)
Explanation: Management's agreement to acknowledge and understand its responsibilities, including its responsibility for the financial statements, is a required precondition for accepting an audit engagement under AU-C 210. If management refuses to do so, the auditor cannot accept the engagement because a fundamental basis for conducting the audit is absent.

Question 17

A CPA firm is the group auditor for a multinational corporation. The firm has engaged a different, unaffiliated CPA firm to act as a component auditor for a significant foreign subsidiary.

In documenting the terms of the component auditor's engagement, which of the following should be established?

  1. An agreement that the group auditor will draft the component auditor's report.
  2. A fixed fee for the component audit that is contingent upon the group auditor's acceptance of the work.
  3. The ethical requirements relevant to the group audit and, in particular, the independence requirements. (correct answer)
  4. A statement that the component auditor will not be named in the group auditor's report.
Explanation: When using the work of a component auditor, the group engagement team must understand whether the component auditor understands and will comply with the ethical requirements relevant to the group audit, specifically independence. This should be established and documented in the terms of the engagement. The component auditor drafts their own communications (A). Fees cannot be contingent (B). The decision to name the component auditor is made by the group auditor, not agreed upon with the component auditor (D).

Question 18

In establishing the terms of an audit, management of a prospective client requests that the engagement letter be modified to state that the responsibility for the detection of material fraud rests solely with management. An auditor who accepts these terms would be in violation of

  1. Generally accepted auditing standards. (correct answer)
  2. The Sarbanes-Oxley Act of 2002.
  3. The AICPA Code of Professional Conduct.
  4. Statements on Standards for Attestation Engagements.
Explanation: Generally accepted auditing standards (GAAS), specifically AU-C 240, define the auditor's responsibilities relating to fraud in an audit of financial statements. While management is responsible for preventing and detecting fraud, the auditor also has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. Accepting terms that negate this responsibility would be a violation of GAAS.

Question 19

A CPA has audited a nonissuer client for several years. In the current year, the client, a family-owned business, was acquired by a large private equity firm. The new owners have indicated they wish to retain the CPA for the current year's audit.

Which of the following is the most appropriate action for the CPA to take regarding the audit engagement terms?

  1. Continue the engagement based on the terms established with the previous owners.
  2. Obtain a verbal confirmation from the new owners that the prior terms are acceptable.
  3. Issue a new engagement letter addressed to the new owners or those charged with governance. (correct answer)
  4. Add an addendum to the original engagement letter signed by the new owners.
Explanation: A significant change in ownership is one of the key factors that indicates a need to revise the terms of the engagement and issue a new engagement letter. This ensures there is a clear understanding between the auditor and the new ownership/governance structure regarding the scope and terms of the audit. A new letter is more formal and appropriate than an addendum in this situation.

Question 20

An auditor is engaged to audit the financial statements of a nonissuer that are prepared in conformity with a special-purpose framework (cash basis). To avoid misunderstandings, the engagement letter should include a statement that

  1. clarifies that the audit will not be conducted in accordance with generally accepted auditing standards.
  2. limits the distribution of the auditor's report to management and the board of directors.
  3. disclaims an opinion on whether the financial statements are presented in accordance with Generally Accepted Accounting Principles (GAAP).
  4. identifies the purpose for which the financial statements are prepared and refers to the expected form of the auditor's report, including the Emphasis-of-Matter paragraph. (correct answer)
Explanation: When auditing financial statements prepared under a special-purpose framework, it is critical that the engagement letter identifies that framework and clarifies the context of the engagement. This includes referencing the expected form of the auditor's report, which will contain an Emphasis-of-Matter paragraph drawing users' attention to the note describing the special-purpose framework. The audit is still conducted under GAAS (A). The report may or may not be limited (B). The opinion is on the special-purpose framework, not a disclaimer on GAAP (C).