Assume all amounts are material. Correct the audit report for the financial statement audit of Bose Inc., an SEC client, for the year ended December 31, 20x1. Gotts and Hydro, CPAs, properly concluded that qualified opinion, dated March 1, 2002, should be issued because the CPA firm was not able to obtain appropriate evidence to verify the value of the client's copper mine. During the year under audit the client changed its method of depreciation from straight line to an accelerated method for equipment. The CPA firm agreed with this material change, and the change is properly accounted for and disclosed in Note 8 to the financial statements. In addition, the CPA firm will not assume responsibility for the work of component auditors who audited a subsidiary, Subco, whose revenues represents 30% of the consolidated totals. Subco received an unmodified opinion. In addition, the client changed the salvage value on its computers, a material item. Required: Insert the correct changes to the standard audit report. Do not correct the CPA firm's opinion on internal control. __________________________________________________

Title: _________________________________________________

To Board of Directors & Stockholders:

A & B: [Report on F/S or no title: Select one.]:

[Mgts Responsibility or no title: Select one.]:

C: [Auditors Responsibility or no title: Select one.]:

We conducted our audit in accordance with _____________

D: [Basis of _____________Opinion or no title: Select one.]:

E: _____________Opinion or no title: Select one.]:

In our opinion, the financial statements present fairly the financial position of

Client, Inc., as of December 31, 20X1, and the results of its operations for the years then ended

in conformity with generally accepted auditing standards.

F:

G:

X: Opinion on Internal Control : Do not correct this .

CPA Firm Name Date: March 15, 20X2