Avalon & Co., CPAs completed the audit of Classic Cars, Inc., a nonpublic entity, on March 15, 2020 for a January 31, 2020 fiscal year end. The audit team encountered no significant issues and found no material misstatements. Avalon & Co. has audited Classic Cars, Inc. for several years and past audits did not reveal any significant issues or material misstatements. The audit team partner determined that a standard (unmodified) report on Classic, Cars Inc.'s financial statements was appropriate. The auditors' report, drafted by Ima Brandnu a staff assistant, is provided below.

Independent Public Company Auditor's Report

We have audited the accompanying financial statements of Classic Cars Inc., which comprise the balance sheet as of January 31, 2020 and the related statements of changes in shareholders' equity and cash flows for the year then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted by the Financial Accounting Standards Board (FASB) in the United States of America.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain absolute assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

Opinion

In our opinion, the financial statements referred to above present fairly, the financial position of Classic Cars, Inc. as of January 31, 2020 and the results of its operations and its cash flows for the year then ended.

(Firm Signature, City and State) Avalon & Co, CPAs, Danbury CT

(Audit Report Date) February 15, 2020

Required: Identify the deficiencies and errors in the draft report. Do not rewrite the report, but be specific as to what is incorrect or omitted. Organize your answer by paragraph or section.