Please indidcate whether the statement is deficient or not deficient:

3. . . . in accordance with accounting principles generally accepted in the O O United States of America. 4. I have performed compilation engagements in accordance with Generally Accepted Auditing Standards promulgated by the Accounting and O O Review Services Committee of the AICPA. 5. I did not audit or review the financial statements, and I was not required to perform any procedures to verify the O O accuracy or completeness of the information provided by management. 6. Accordingly, I provide only limited assurance on these financial statements. O O 7. Management has elected to omit substantially all of the disclosures (and the statement of cash flows) required by O O generally accepted accounting principles.8. If the omitted disclosures and statements were included in the financial statements, they might influence the user's conclusions about O O the company's financial position, results of operations, and cash flows. 9. I am not independent with respect to Ajax Company. O O 10. This lack of independence is due to my child's ownership of a material direct O O financial interest in Ajax Company.The statements below were taken from a report drafted on October 25, Year 1, by Major, CPA, at the completion of the engagement to compile the financial statements of Ajax Company for the year ended September 30, Year 1. Ajax is a nonpublic entity in which Major's child has a material direct financial interest. Ajax decided to omit substantially all of the disclosures required by GAAP because the financial statements will be for management's use only. The statement of cash flows also was omitted because management does not believe it to be a useful financial statement. Select from the choices provided to indicate which items in Major's report on the compiled financial statements contain a deficiency. Item Deficient Not deficient 1. Management is responsible for the accompanying financial statements of O O Ajax Company, . . . 2. . . . which comprise the balance sheets as of December 31, 20X2 and 20X1, and the related statements of income, changes in stockholders' equity, and O O cash flows for the years then ended, and the related notes to the financial statements