The following tentative auditor's report was drafted by a staff accountant and submitted to a partner in the public accounting firm of Bettrioni & Bee.

AUDITOR'S REPORT To the Audit Committee of Athabaska Widgets, Inc.
We have examined the consolidated balance sheet of Athabaska Widgets, Inc., and subsidiaries as of December 31, 2001, and the related consolidated statement of income, retained earnings, and cash flow for the year then ended. These financial statements are the responsibility of the com¬ pany's management. Our responsibility is to express an opin¬ ion on these financial statements based on our audit.
Our examinations were made in accordance with Canadian generally accepted auditing standards as we considered neces¬ sary in the circumstances. Other auditors examined the finan¬ cial statements of certain subsidiaries and have furnished us with reports thereon containing no exceptions. Our opinion expressed herein, insofar as it relates to the amounts included for those subsidiaries, is based solely upon the reports of the other auditors.
As discussed in note 4 to the financial statements, on Jan¬ uary 8, 2002, the company halted the production of certain medical equipment as a result of inquiries by the Alberta Med¬ ical Association, which raised questions as to the adequacy of some of the company's sterilization equipment and related procedures. Management is not in a position to evaluate the effect of this production halt and the ensuing litigation, which may have an adverse effect on the financial position of Athabaska Widgets, Inc.
As fully discussed in note 7 to the financial statements, in 2001 the company extended the use of the average cost method of accounting to include all inventories. In examining inventories, we engaged Dr. Irwin Same (Nobel Prize winner, 1994) to test check the technical requirements and specifica¬ tions of certain items of equipment manufactured by the company.
In our opinion, except for the effects, if any, on the finan¬ cial statements of the ultimate resolution of the matter dis¬ cussed in the second preceding paragraph, the financial statements referred to above present fairly the financial posi¬ tion of Athabaska Widgets, Inc., as of December 31, 2001, the results of operations for the year then ended, in confor¬ mity with Canadian generally accepted accounting principles.
To be signed by Bettrioni & Bee March 1, 2002, except for note 4 for which the date is January 8, 2002 Required Identify deficiencies in the staff accountant's tentative report that constitute departures from the generally accepted stan¬ dards of reporting.