The auditor's standard report contains standardized wording.

Listed below are the sentences in the standard report.

1. We conducted our audit in accordance with generally accepted auditing standards.

2. We believe that our audit provides a reasonable basis for our opinion.

3. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of X Company as of December 31,19X2 and 19X1, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.

4. We have audited the accompanying balance sheets of X Company as of December 31, 19X2 and 19X1, and the related statements of income, retained earnings, and cash flows for the years then ended.

5. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.

6. Our responsibility is to express an opinion on these financial statements based on our audits.

7. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
8. An audit also includes assessing the accounting principles used and significant esti¬
mates made by management, as well as evaluating the overall financial statement presentation.
9. These financial statements are the responsibility of the Company's management.

Required

a. Identify the paragraph in which each sentence appears. If there is more than one sentence in the paragraph indicate the sequence of the sentence in the paragraph.

b. State the primary purpose of each of the paragraphs in the standard report.