Your staff assistant has prepared a draft of a report on quarterly information of the Royal Company, a public entity. You determine that the first paragraph of the report is correct but that a number of errors exist in the following two paragraphs of the report. A review of interim financial data consists principally of obtaining evidential matter about the system, determining the accuracy of the data, applying ratio analysis to financial data, and performing substantive tests of transactions. This review does not approximate an examination made in conformity with GAAS. Accordingly, we disclaim an opinion on the data.

Based on our comprehensive review, we believe no material modifications are necessary to make the accompanying financial data be in conformity with generally accepted accounting principles.

Required:

a. Identify the words, phrases, and sentences that are incorrect or missing. For each item indicate the proper wording.

b. Draft the first and last paragraphs of the report on interim financial information.