Your partner drafted the following auditors’ report yesterday. You need to describe the reporting deficiencies, explain the reasons for them, and discuss with the partner how the report should be corrected. You have decided to prepare a three- column worksheet showing the deficiencies, reasons, and corrections needed. Your partner’s report follows:

I made my examination in accordance with auditing standards generally accepted in the United States of America. However, I am not independent with respect to Mavis Corporation because my wife owns 5 percent of the company’s outstanding common stock. The accompanying balance sheet as of December 31, 2014, and the related statements of income, changes in shareholders’ equity, and cash flows for the year then ended were not audited by me. Accordingly, I do not express an opinion on them.

Required:

Prepare the three- column worksheet described.