The following report was drafted on October 25, 2015, by Major, CPA, at the comple- tion of an engagement to compile the financial statements of Ajax Company for the fis- cal year ended September 30, 2015. Ajax is a non-public entity in which Majors child

has a material direct financial interest. Ajax decided to omit substantially all of the

disclosures required by generally accepted accounting principles because the financial

statements will be for managements use only. The statement of cash flows was also

omitted because management does not believe it to be a useful financial statement.

To the Board of Directors of Ajax Company:

I have compiled the accompanying financial statements of Ajax Company as of

September 30, 2015, and for the year then ended. I planned and performed the compila- tion to obtain limited assurance about whether the financial statements are free of material

misstatements.

Management is responsible for the preparation and fair presentation of the financial

statements in accordance with accounting principles generally accepted in the United

States of America and for designing, implementing, and maintaining internal control rel- evant to the preparation and fair presentation of the financial statements.

My responsibility is to conduct the compilation in accordance with Statements on Stan- dards for Accounting and Review Services issued by the American Institute of Certified

Public Accountants. It is substantially less in scope than an audit in accordance with gen- erally accepted auditing standards, the objective of which is the expression of an opinion

regarding the financial statements taken as a whole. I have not audited the accompanying

financial statements and, accordingly, do not express any opinion on them.

Management has elected to omit substantially all of the disclosures required by

accounting principles generally accepted in the United States of America. If the omit- ted disclosures were included in the financial statements, they might influence the users

conclusions about the companys financial position, results of operations, and cash flows.

I am not independent with respect to Ajax Company. This lack of independence is due

to my daughters ownership of a material direct financial interest in Ajax Company.

This report is intended solely for the information and use of the board of directors and

management of Ajax Company and should not be used for any other purpose.

Major, CPA

Required:

Identify the deficiencies contained in Majors report on the compiled financial state- ments. Group the deficiencies by paragraph where applicable. Do not redraft the

report.

(AICPA, adapted)