Essay on Example Auditing Case

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Example auditing case
1)” Based on the information given in this case and your knowledge of auditor’s reports, identify the deficiencies in the draft of the proposed report. Do not redraft the report, but provide justification or explanation for each of the deficiencies you identify” (Pany, Auditor's Report, 2010).
A. In the Introduction paragraph it states “As discussed in Note K to the financial statements, the Company has properly disclosed a subsequent event dated March 14, 20x9” (Pany, Auditor's Report, 2010). This does not belong in this section of the report; it belongs below the scope paragraph. The introduction paragraph is to “clarify the responsibilities of management and the auditors” (Pany, Professional Standards, 2010).
B.
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Further, the company does not provide for income taxes with respect to the differences between financial income and taxable income arising because of the use, for income tax purposes, of the installment method of reporting gross profit from certain types of sales. ” (Pany, Auditor's Report, 2010). This statement belongs below the scope paragraph. This statement should also be broken down into two different notes relating to the financial statements because they refer to two different areas of the statements.
F. At the bottom of this report it states, “We believe that these appraisal values are reasonable” (Pany, Auditor's Report, 2010). This does not belong here because they do not want your opinion in this area.

2) “Explain how you would correct each of the deficiencies you identified in requirement 1” (Pany, Auditor's Report, 2010). Refer back to question 1 the errors found in the report.
A. I would omit this statement and place it below the scope paragraph of the report
B. I would omit this statement completely.
C. I would replace the statement with the following statement: Because of the effects of the matters discussed in the preceding paragraph, the financial statements referred to above are not fairly presented in all material respects
D. I would omit this statement completely.
E. These statements need to be placed below the scope paragraph and broke down into two different notes referring

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