Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

Which of the following is NOT considered a special purpose framework?

1. Basis of accounting used by an entity to file its income tax return.

2. Basis of accounting promulgated by the International Accounting Standards Board.

3. Cash receipts and disbursements basis of accounting.

4. Basis of accounting used by an entity to comply with government reporting requirements.

The correct answer is: Basis of accounting promulgated by the International Accounting Standards Board.

The reasoning behind identifying the option related to the basis of accounting promulgated by the International Accounting Standards Board (IASB) as not a special purpose framework lies in the nature and intent of the frameworks in question. Special purpose frameworks are designed for specific reporting needs that deviate from the general purpose financial reporting frameworks like Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). They are not meant to provide a universal overview of an entity's financial position but instead cater to particular user groups or comply with specific regulations. The basis of accounting promulgated by the IASB pertains to International Financial Reporting Standards, which is a comprehensive framework intended for general financial reporting purposes. This framework is widely accepted and serves a broad range of users, including investors, creditors, and regulatory agencies, making it a general purpose framework rather than a special one. In contrast, the other options each reflect unique reporting requirements or purposes. For example, the bases of accounting related to tax returns, government compliance, or cash receipts and disbursements are all tailored to meet specific needs that do not aim to present a complete picture of financial health in the same manner as GAAP or IFRS. These frameworks are limited in scope and targeted toward specific audiences or conditions