a. Identify and explain any items included in Other Information that need not be part of the auditor's report b. Explain the defciencies in Patel's report as drafted Requirement a Ideniy and explain any items included in "Other Inonmation that need not be part of the auditor's report For any items that you answer No to in the "Needed in Auditor's Report column, select the leter corresponding to the explanation (from the list provided) as to why he item is not needed. If you select "Yes to identify an item that is needed in the auditor's report, select ha in the explanation column (Click the icon to vieww the list of possible explanations for why an item might not be needled in the auditor's report) Needed in Explanation Auditors nat needed in Report? report Bellamy is a private corpcration and is presenting comparative financialstatements During 2018, Bellamy acquired Stockard Inc, and the eFects of that transaction are reflected in the current yearfinancial statements Infomation about this transaction is disclosed in footnote 12 Patel was unable to perform nomal accounts receivable confirmation procedures for accounts that are material, but not pervasive, to the financial statements Unfortunately. Patel was not able to perform aternative procedures to support the existence of the receivables. Bellamy Corporation is the delendant in litigaton where there is a reasonable possbility tha Belamy may be required to pay a substanial amount of cash, which might require the sale o certain fxed assets. Because management does not want to provide any information that the plaintiff might use against Bellamy, the case is not discussed in the financial statements Bellamy issued debentures on January 31, 2015, in the amount of $10 million. The funds obtained from the issuance were used to finance the expansion of plant facilties. The debenture agreement restricts the payment of future cash dividends to eamings aher December 31. 2020. Belamy has disclosed this in the footnotes to the financial statements Requirement b. Explain the deficiencies in Paters report as drafted. dentify which, of the following. are deficiencies in Patel's report as drated. (Select all that apply) 1. There s no separate scope paragraph that describes what an audit is Two required sentences are completely omited: An audit includes examining, on a best basis, evidence supportng the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimaces made by management, wel as evaluating the overall financial statement presentanon The opin on paragraph cludes the words generally accepted auditing standards" rather than the phrase accounting principles generaly accepted in the United States of America 2. An additional paragraph should be included which describes the dividend restrictions and the refusal of the client to present a statement of cash owws 3. 4 There is no enton the report that Bellamy is a pr ate corporation. 5 There s no separate introductory paragraph that states the financa! 6. The opnion paragraph states that accounting prna ies vere consistent with those used in the prier year. The opinion paragraph should make no eference to cons stency. The audit report is neither addressed nor dated and it does not contain a title catements audited, dates, and the responsibilices of management and the auditor 7. The balance sheet is as of a specific date, whereas the nome statement and the statement of retained earnings are for a pariod of time. The scope paragraph should identify the period of time. 8. 9. The opinion should be quaifed rather than being unqualifed 10. There are comparative statements, but the audit report identifles and deals with only the current years financial statements. An opinion must also be ncluded for the prior period financial statements There s no mention n the report that Belamy Corporation is a defendant n a isgation. The opn on paragraph excludes the reg red phrase all matenal The word mater as 11 13 15. duded from the sco e paragraph ise of material 12 A separate paragraph should be included stating hat generaly accepted accounting principles were not consistently applied. The audit was made n accordance with auding standards generaly accepted in the United States of America rather than generally accepted accounting standards 14. a. Identify and explain any items included in Other Information that need not be part of the auditor's report b. Explain the defciencies in Patel's report as drafted Requirement a Ideniy and explain any items included in "Other Inonmation that need not be part of the auditor's report For any items that you answer No to in the "Needed in Auditor's Report column, select the leter corresponding to the explanation (from the list provided) as to why he item is not needed. If you select "Yes to identify an item that is needed in the auditor's report, select ha in the explanation column (Click the icon to vieww the list of possible explanations for why an item might not be needled in the auditor's report) Needed in Explanation Auditors nat needed in Report? report Bellamy is a private corpcration and is presenting comparative financialstatements During 2018, Bellamy acquired Stockard Inc, and the eFects of that transaction are reflected in the current yearfinancial statements Infomation about this transaction is disclosed in footnote 12 Patel was unable to perform nomal accounts receivable confirmation procedures for accounts that are material, but not pervasive, to the financial statements Unfortunately. Patel was not able to perform aternative procedures to support the existence of the receivables. Bellamy Corporation is the delendant in litigaton where there is a reasonable possbility tha Belamy may be required to pay a substanial amount of cash, which might require the sale o certain fxed assets. Because management does not want to provide any information that the plaintiff might use against Bellamy, the case is not discussed in the financial statements Bellamy issued debentures on January 31, 2015, in the amount of $10 million. The funds obtained from the issuance were used to finance the expansion of plant facilties. The debenture agreement restricts the payment of future cash dividends to eamings aher December 31. 2020. Belamy has disclosed this in the footnotes to the financial statements Requirement b. Explain the deficiencies in Paters report as drafted. dentify which, of the following. are deficiencies in Patel's report as drated. (Select all that apply) 1. There s no separate scope paragraph that describes what an audit is Two required sentences are completely omited: An audit includes examining, on a best basis, evidence supportng the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimaces made by management, wel as evaluating the overall financial statement presentanon The opin on paragraph cludes the words generally accepted auditing standards" rather than the phrase accounting principles generaly accepted in the United States of America 2. An additional paragraph should be included which describes the dividend restrictions and the refusal of the client to present a statement of cash owws 3. 4 There is no enton the report that Bellamy is a pr ate corporation. 5 There s no separate introductory paragraph that states the financa! 6. The opnion paragraph states that accounting prna ies vere consistent with those used in the prier year. The opinion paragraph should make no eference to cons stency. The audit report is neither addressed nor dated and it does not contain a title catements audited, dates, and the responsibilices of management and the auditor 7. The balance sheet is as of a specific date, whereas the nome statement and the statement of retained earnings are for a pariod of time. The scope paragraph should identify the period of time. 8. 9. The opinion should be quaifed rather than being unqualifed 10. There are comparative statements, but the audit report identifles and deals with only the current years financial statements. An opinion must also be ncluded for the prior period financial statements There s no mention n the report that Belamy Corporation is a defendant n a isgation. The opn on paragraph excludes the reg red phrase all matenal The word mater as 11 13 15. duded from the sco e paragraph ise of material 12 A separate paragraph should be included stating hat generaly accepted accounting principles were not consistently applied. The audit was made n accordance with auding standards generaly accepted in the United States of America rather than generally accepted accounting standards 14