Question 5 (20 marks)

Your firm, D&B LLP, is the auditor of Green thumb Ltd. (GT). Alexis owns 80% of the shares of GT. The other 20% is owned by friends and relatives.

The auditor's report below was drafted by a new staff accountant at the firm. GT. is a privately held company incorporated under the provincial laws of Ontario. The Company has a December 31styear end. The report was submitted to the engagement partner who reviewed the audit working papersand properly concludedthat an unmodified opinion should be issued. In drafting the report, the new staff accountant considered the following:

Prior year financial statements highlighted that GT has experienced recurring operating losses. A going concern note was properly disclosed in the financial statements. 2020

The audit work was fully completed and the audit report was accepted by Management on March 2, 2020.

The audit report was issued on March 15, 2020. ____________________________________________________________________________________Independent Auditors' Report

To Alexis Green thumb

Report on the Financial Statements

We have audited the financial statements of Green thumb Ltd, which comprise the statement of financial position as at December 31, 2019, and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects the financial position of the Company as at December 31, 2019, and [of] its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).

Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion or some modification thereof. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with CASs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Basis for Opinion

We conducted our audit in accordance with the financial reporting framework. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.

We are independent of the Company in accordance with the Provincial Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants together with the ethical requirements that are

relevant to our audit of the financial statements in [jurisdiction], and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

February 15th, 2020

Required

Identify the deficiencies in the order in which they appear in the auditor's report drafted by Beanie. Do not redraft the report. Hint: Apply concepts from the Canadian Auditing Standards CAS 700, 705, 706 and 710.

Use the following framework to answer the question.

Violation Explanation from the question