Norman Lewis, an inexperienced member of your staff, has compiled the financial statements of Williams Grocery. He has submitted the following report for your review:
The accompanying financial statements have been compiled by us. A compilation is an accounting service, but we also applied certain analytical procedures to the financial data.
As explained in Note 3, the Company changed accounting principles for accounting for its inventories. We have not audited or reviewed the accompanying financial statements, but nothing came to our attention to indicate that they are in error.
Describe the deficiencies in the report, give reasons why they are deficiencies, and briefly discuss how the report should be corrected. Do not discuss the addressee, signature, and date.
Organize your answer sheet asfollows:

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Deficiency Reason Correction