The following report on the basic financial statements was drafted by a staff assistant at the completion of the review engagement of Delano Company, a continuing client for the year ended September 30, \(20 \mathrm{X} 8\).

Required:

Identify the deficiencies in the draft of the proposed report on the comparative financial state- ments. Group the deficiencies by paragraph.

Transcribed Image Text:

To the Board of Directors of Delano Company: We have reviewed the accompanying balance sheet of Delano Company as of September 30, 20X8, and the related statements of income and retained earnings for the year then ended, in accordance with generally accepted auditing standards. Our review included such tests of the accounting records as we considered necessary in the circumstances. A review consists principally of inquiries of company personnel. It is substantially less in scope than an audit, but more in scope than a compilation. Accordingly, we express only lim- ited assurance on the accompanying financial statements. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles applied on a consistent basis. November 2, 20X8 Anston & Co., CPAS