R. Gilsdorf, CPA, has prepared the following report on the cash basis financial statements of the ABC Company. I have audited the balance sheet and income statement of ABC Company as of December 31, 19X9 and for the year then ended. My audit was made in accor- dance with generally accepted auditing standards and, accordingly, included such tests of the accounting records as I considered necessary in the circumstances. In my opinion, the above-mentioned financial statements present fairly ABC Company's financial position and results of operations consistent with the cash basis of accounting. Explain the deficiencies in this special report.