Question
Below is an audit report for an integrated audit combined to include the opinions on both ICFR and the financial statements. Phrases reflecting 20 items
Below is an audit report for an integrated audit combined to include the opinions on both
ICFR and the financial statements. Phrases reflecting 20 items that are required to be in
this report have been removed and are provided in the list after the report. Select the
proper phrase for each missing item and place the letter of the phrase on the answer space
provided. All phrases will be used, and none will be used twice.
Report of _1_ Registered Public Accounting Firm
We have audited the accompanying balance sheets of W Company as of December 31,
20X8 and 20X7, and the related statements of income, stockholders equity and
comprehensive income, and cash flows for each of the years in the threeyear period
ended December 31, 20X8. We also have audited W Companys internal control over
financial reporting as of December 31, 20X8, based on [Identify control criteria, for
example, criteria established in Internal ControlIntegrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).].
W Companys management is responsible for these__2__, for maintaining __3__, and
for__4_, included in the accompanying ___5__. Our responsibility is to __6__ and
__7__. __8__. Those __9__the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement and whether effective internal
control over financial reporting was maintained __10__. Our audits of the financial
statements __11__ evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by
management, and __12__. Our audit of internal control over financial reporting included
obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, and testing __13__. Our audits also included performing
such other procedures as we considered necessary in the circumstances. We believe that
our audits provide a reasonable basis for our opinions. A companys internal control over
financial reporting is a process designed to provide reasonable assurance regarding _14_ and the preparation for external purposes in accordance with the generally accepted accounting principles. A company's internal control over financial reporting including those policies and procedures that (1) pertain to the maintenance of records, that in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and the receipts and expenditures of the company are being made only in accordance with authorization of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
_15_ internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation effectiveness to future periods _16_ may become inadequate _17_, or the degree of compliance with the policies or procedures may deteriorate.
_18_, the financial statements refereed to above fairly, in all material respects, the financial position of W. Company as of December 31, 20X8 and 20X7, and the results of it operation and it cash flow for each of the years in the three year period ended December 91, 20X8 _19_. Also, in our opinion, W. company maintained, in all material respects, effective internal control _20_ as of Decemeber 31. 20X8, based on
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