Vertical Analysis Perry & Price, CPAs, audited the consolidated financial statements of Bond Company for the year ended December 31, 20X1, and expressed an adverse opinion because Bond carried its plant and equipment at appraisal values and provided for depreciation on the basis of such values. Perry & Price also audited Bond's financial statements for the year ended December 31, 20X2. These consolidated financial statements are being presented on a comparative basis with those of the prior year and an unmodified opinion is being expressed. Smith, the engagement supervisor, instructed Adler, an assistant on the engagement, to draft the auditor's report on May 3, 20X3, the date of completion of the fieldwork. In drafting the report. Adler considered the following: Bond recently changed its method of accounting for plant and equipment and restated its 20X1 consolidated financial statements to conform with GAAP. Consequently, the CPA firm's present opinion on those statements is different (unmodified) from the opinion expressed on May 12, 20X2. Larkin & Lake, CPAs, audited the financial statements of BX, Inc., a consolidated subsidiary of Bond, for the year ended December 31, 20X2. The subsidiary's financial statements reflected total assets and revenues of 2% and 3%, respectively, of the consolidated totals. Larkin & Lake expressed an unmodified opinion and furnished Perry & Price with a copy of the auditor's report. Perry & Price has decided to assume responsibility for the work of Larkin & Lake insofar as it relates to the expression of an opinion on the consolidated financial statements taken as a whole.