Financial Statements with a GAAP Departure (How to Issue)

By Charles Hall | Accounting and Auditing

Jun 20
Share1
Tweet
Share
1 Shares

Can CPAs intentionally issue financial statements with a GAAP departure? Yes. And sometimes it might be preferable. 

financial statements with GAAP departure

I received a phone call last week from a CPA asking if he could issue a balance sheet with a GAAP departure? His client's bank requested a GAAP balance sheet with an intentional departure (the bank wanted one number to be shown at fair value and GAAP calls for cost). 

I advised the CPA how to issue financial statements with an intentional GAAP departure. Watch the video to see how..

One caution in issuing financial statements with a GAAP departure: The AICPA Code of Conduct does not allow a CPA to issue financial statements that are intentionally misleading. So, always communicate the departure. Departures from reporting frameworks should never be hidden.

The video refers to selected disclosures. You can see information about selected disclosures here.

The video also discusses AR-C 70, Preparation of Financial Statements. You can see information about AR-C 70 here.

Learn from my CPA Hall Talk newsletter!

Get my free weekly accounting and auditing digest with the latest content.

Powered by ConvertKit
Share1
Tweet
Share
1 Shares
Follow

About the Author

Charles Hall is a practicing CPA and Certified Fraud Examiner. For the last thirty years, he has primarily audited governments, nonprofits, and small businesses. He is the author of The Little Book of Local Government Fraud Prevention and Preparation of Financial Statements & Compilation Engagements. He frequently speaks at continuing education events. Charles is the quality control partner for McNair, McLemore, Middlebrooks & Co. where he provides daily audit and accounting assistance to over 65 CPAs. In addition, he consults with other CPA firms, assisting them with auditing and accounting issues.

Leave a Comment:

(3) comments

armando Balbin July 25, 2018

Thank you Charles for such good information

Reply
Charles Hall July 25, 2018

Thanks Armando. Always good to receive your encouragement. Hope you are doing well.

Reply
Charles Hall July 25, 2018

Thanks Armando. I appreciate the encouragement.

Reply
Add Your Reply

Leave a Comment:

Previous Post Going Concern: How to Understand the Accounting and Auditing Standards Next Post Livescribe: Note Taking Magic (for CPAs)
>
close

CPA Hall Talk

Sign up for my

free newsletter

Charles Hall
  • check-square-o
    Be more efficient and effective in delivering accounting services
  • check-square-o
    Be in the know regarding accounting and auditing standards
  • check-square-o
    Receive powerful technology tips 
envelope-open-o