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On March 12, 2016, Kristen & Valentine, CPAs, completed the audit of the financial statements of Modern Museum, Inc., for the year ended December 31, 2015. Modern is a privately held company. Modern Museum presents comparative financial statements on a modified cash basis. Assets, liabilities, fund balances, support, revenues, and expenses are recognized when cash is received or disbursed, except that Modern includes a provision for depreciation of buildings and equipment. Kristen & Valentine believes that Modern's three financial statements, prepared in accordance with a basis of accounting other than generally accepted accounting principles, are adequate for Modern's needs and wishes to issue a special report on the financial statements. Kristen & Valentine has gathered sufficient competent evidence to be satisfied that the financial statements are fairly presented according to the modified cash basis. Kristen & Valentine audited Modern's 2014 financial statements and issued an auditor's special report expressing an unmodified opinion.
Required:
Draft the audit report to accompany Modern's comparative financial statements.
(AICPA, adapted)
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