Answer to question 12.56

Required; Identify the deficiencies in the following draft of the report. Do not rewrite the report. (AICPA adapted) 12.56 Audit Report Deficiencies: Comparative Reporting. An assistant drafted the following auditors' report at the completion of the audit of Cramdon Inc. on March 5, 2018. The part ner in charge of the engagement has decided the opinion on the 2017 financial statements should be modified only with reference to the change in the method of computing the cost of inventory. In 2016, Cramdon used the nextin, first-out (NIFO) method, which is not permissible under GAAP, but in 2017 changed to FIFO and restated the 2016 financial statements. The auditors' report on the 2016 financial statements was prepared by the same firm and dated March 5, 2017