What it is
An audit of financial statements prepared on the cash basis or the income tax basis follows the same structure as a GAAP report, with three differences: the opinion refers to the special purpose framework, management’s responsibilities add that the framework is acceptable in the circumstances, and the report carries an emphasis-of-matter paragraph alerting readers to the basis of accounting.
This template has two opinion alternatives (cash basis and income tax basis), the basis of accounting paragraph, the adapted management responsibilities section and a bracketed restriction-on-use paragraph for frameworks designed for specific users or contractual or regulatory bases. Take the opinion and any restriction wording from the current AU-C 800 and AU-C 905 illustrations.
When to use it
- An owner-managed company or nonprofit reports on the cash or modified cash basis for its lender or board.
- A partnership or S corporation issues income tax basis statements.
- You need the basis of accounting paragraph and the adjusted management responsibility wording.
What’s inside
- Two opinion alternatives: cash basis, and income tax basis
- Basis for Opinion with the independence statement
- Emphasis of Matter: Basis of Accounting, as AU-C 800 requires
- Responsibilities of management adapted for a special purpose framework
- Auditor responsibilities and a bracketed restriction-on-use paragraph
Standard cited
This template follows AU-C 800. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
Why is the basis of accounting paragraph there?
Because the statements are on a basis other than GAAP, AU-C 800 has the report draw attention to the note that describes the basis. It is an emphasis-of-matter paragraph, and the opinion is not modified by it.
Does a special purpose framework report need a restriction on use?
AU-C 800 and AU-C 905 govern. Whether one is needed turns on whether the framework is designed for a broad range of users or for specific users, such as under a contract or a regulator. The template brackets the paragraph for you to keep or delete.
Does it matter whether the framework is a compliance or a fair presentation framework?
Yes. For a fair presentation framework the opinion says the statements present fairly; for a compliance framework it says they were prepared, in all material respects, in accordance with the framework. Decide which applies to the framework used (AU-C 200 definitions) and word the opinion to match.
Related templates
- Independent Auditor's Report — Unmodified Opinion (AU-C 700)
- Compilation Report and Management Letter Shells (AR-C 80)
- Going Concern Evaluation Memo (AU-C 570 / ASC 205-40)
Last updated 11/05/2026. All free templates.