17-41
Russ Major, CPA, drafted the following report on October 25,2015 at the completion of the engagement to compile the financialstatements of Ajax Company for the year ended September 30, 2015.Ajax is nonpublic organization in which Major's child has amaterial direct financial interest. Ajax decided to omitsubstantially all of the disclosures required by GAAP becasue thefinancial statements will be only for mangement's use. Thestatement of cash flows was also omitted because management doesnot believe it to be a useful financial statement.
Identify the deficiencies contained in Major's report on thecompiled financial statements. Group the deficiencies by paragraphwhen applicable. Do not redraft the report.
To the Board of Drictors of Ajax Company:
I have complied the accompanying financial statements ofAjax Company as of September 30, 2015, and for the year then ended.I planned and performed the compilation to obtain limited assuranceabout whether the financial statements are free of matrialmisstatements.
A compilation is limited to presenting information inthe form of financial statements. It is substantially less in scopethatn an audit in accordance with generally accepted auditingstandards, the objective of which is the expression of an opinionregarding the financial statements taken as a whole. I have notaudited the accompanying financial statements and, accordingly, donot express any opinion on them.
Management has elected to omit substantially all of thedisclosures required by generally accpeted accounting principles.If the omitted disclosures were included in the financialstatements, they might influence the user's conclusions about theCompany's financial position, results of operations, and changes infinancial position.
I am not independent with respect to Ajax Company. Thislack of of independence is due to my child's ownership of amaterial direct financial interest in Ajax Company.
This report is intended solely for the information anduse of the Board of Directors and management of Ajax Company andshould not be used for any other purpose.
17-41
Russ Major, CPA, drafted the following report on October 25,2015 at the completion of the engagement to compile the financialstatements of Ajax Company for the year ended September 30, 2015.Ajax is nonpublic organization in which Major's child has amaterial direct financial interest. Ajax decided to omitsubstantially all of the disclosures required by GAAP becasue thefinancial statements will be only for mangement's use. Thestatement of cash flows was also omitted because management doesnot believe it to be a useful financial statement.
Identify the deficiencies contained in Major's report on thecompiled financial statements. Group the deficiencies by paragraphwhen applicable. Do not redraft the report.
To the Board of Drictors of Ajax Company:
I have complied the accompanying financial statements ofAjax Company as of September 30, 2015, and for the year then ended.I planned and performed the compilation to obtain limited assuranceabout whether the financial statements are free of matrialmisstatements.
A compilation is limited to presenting information inthe form of financial statements. It is substantially less in scopethatn an audit in accordance with generally accepted auditingstandards, the objective of which is the expression of an opinionregarding the financial statements taken as a whole. I have notaudited the accompanying financial statements and, accordingly, donot express any opinion on them.
Management has elected to omit substantially all of thedisclosures required by generally accpeted accounting principles.If the omitted disclosures were included in the financialstatements, they might influence the user's conclusions about theCompany's financial position, results of operations, and changes infinancial position.
I am not independent with respect to Ajax Company. Thislack of of independence is due to my child's ownership of amaterial direct financial interest in Ajax Company.
This report is intended solely for the information anduse of the Board of Directors and management of Ajax Company andshould not be used for any other purpose.
