Chapter 25, Problem 25DQP

Jennifer Branson is a new staff auditor on the audit engagement of Greenville Light & Sound, which is a publicly traded company with a calendar year-end. The engagement team has completed its review of the third-quarter financial statements, and the firm has been asked to issue a review report on those statements. As the senior auditor on the engagement, you asked Jennifer to draft the firm’s report for your review. Here’s what she provided you:

We have examined the accompanying balance sheet of Greenville Light & Sound as of September 30, 2016, and the related statement of operations for the three quarterly periods then ended. A review includes primarily applying analytical procedures to management’s financial data, making inquiries of management, and testing internal controls over financial reporting. A review is substantially less in scope than an audit. These financial statements are the responsibility of the company’s management.

We conducted our review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain assurance that there are no misstatements in the financial statements in order to express our opinion on them.

Based on our review, it is our opinion that the financial statements are in accordance with accounting standards generally accepted by the Securities and Exchange Commission for the quarter ended September 30, 2016.

What changes are needed to the report draft provided by Jennifer?