Choice "C" is correct. A report using the special purpose framework required by the regulatory agency would be issued and include an opinion paragraph that contains an opinion on the special purpose financial statements and a reference to the special purpose framework used to prepare the financial statements. The report would also contain an other-matter paragraph restricting the use of the auditor's report. Choices "a" and "b" are incorrect. The special purpose framework report would be unmodified since Green concluded that the financial statements were fairly presented on the prescribed basis.
Choice "d" is incorrect. The wording of the special purpose framework report varies from the auditor's standard three-paragraph report, and includes an emphasis-of-matter and other-matter paragraphs.