Before the present form of the standard audit report was adopted, the following form was used:

We have examined the balance sheet of \(\mathrm{X}\) Company as of December 31, 19X7, and the related statements of income, retained earnings, and changes in financial position for the year then ended. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the financial statements referred to above present fairly the financial position of X Company as of December 31, 19X7, and the results of its operations and the changes in its financial position for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.

a. Discuss the substantive differences between the present and prior reports.

b. Which form of report best communicates the auditor's responsibility and is least likely to be misunderstood by the public? Why?