For Rainmaker Entertainment Inc. (Rainmaker), study the Independent Auditor's Report given on MyAccountingLab. Answer the following questions about Rainmaker's internal controls and cash position:
1. What is the name of Rainmaker's outside auditing firm? What office of this firm signed the auditor's report? How long after Rainmaker's year end did the auditors issue their opinion?
2. Who bears responsibility for the financial statements? How can you tell?
3. Does the auditor guarantee that internal controls are effective? Explain.
4. What standard of auditing did the outside auditors use in examining Rainmaker's financial statements? By what accounting standards were the statements evaluated?
5. By how much did Rainmaker's cash position change during 2011?
6. The cash flow statement, discussed in detail in Chapter 17, tells why the change in cash position (increase or decrease) occurred. Which type of activity-operating, investing, or financing-contributed most to this change?