Murray & Co.,CPAs,completed the audit of Classic,Inc.,a public entity,on March 1,2013 for a January 31,2013 fiscal year-end.The audit team encountered no significant issues and found no material misstatements.Murray & Co.has audited Classic,Inc.,for several years,and past audits did not reveal any significant issues or material misstatements.The audit team partner determined that a standard report on Classic's financial statements was appropriate.The auditors' report,drafted by I.M.Nu,a staff assistant,follows.
We have audited the accompanying consolidated balance sheets of Classic,Inc.and subsidiaries as of January 31,2013,and 2012,the related consolidated statements of shareholders' equity,and cash flows for each of the years in the three-year period ended January 31,2013.These financial statements are the responsibility of Classic,Inc.'s management.
We conducted our audits in accordance with the Statements on Auditing Standards issued by the Auditing Standards Board of the American Institute of Certified Public Accountants.Those standards require that we plan and perform the audit to obtain absolute assurance about whether the financial statements are free of material misstatement.An audit includes examining,on a test basis,evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the internal controls,accounting principles used,and significant estimates made by management as well as evaluating the overall financial statement presentation.We believe that our audits provide an unconditional basis for our opinion.
In our opinion,the financial statements referred to above correctly show the financial position of Classic,Inc.and consolidated subsidiaries at January 31,2013 and 2012,and the results of their operations for the years then ended.
Required:
Identify the deficiencies and errors in the draft report.Do not rewrite the report,but be specific as to what is incorrect or omitted.Organize your answer by paragraph.

Question

Quizplus · Accepted Answer

The Answer of Murray & Co.,CPAs,completed the audit of Classic,Inc.,a public entity,on March 1,2013 for a January 31,2013 fiscal year-end.The audit team encountered no significant issues and found no material misstatements.Murray & Co.has audited Classic,Inc.,for several years,and past audits did not reveal any significant issues or material misstatements.The audit team partner determined that a standard report on Classic's financial statements was appropriate.The auditors' report,drafted by I.M.Nu,a staff assistant,follows.
We have audited the accompanying consolidated balance sheets of Classic,Inc.and subsidiaries as of January 31,2013,and 2012,the related consolidated statements of shareholders' equity,and cash flows for each of the years in the three-year period ended January 31,2013.These financial statements are the responsibility of Classic,Inc.'s management.
We conducted our audits in accordance with the Statements on Auditing Standards issued by the Auditing Standards Board of the American Institute of Certified Public Accountants.Those standards require that we plan and perform the audit to obtain absolute assurance about whether the financial statements are free of material misstatement.An audit includes examining,on a test basis,evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the internal controls,accounting principles used,and significant estimates made by management as well as evaluating the overall financial statement presentation.We believe that our audits provide an unconditional basis for our opinion.
In our opinion,the financial statements referred to above correctly show the financial position of Classic,Inc.and consolidated subsidiaries at January 31,2013 and 2012,and the results of their operations for the years then ended.
Required:
Identify the deficiencies and errors in the draft report.Do not rewrite the report,but be specific as to what is incorrect or omitted.Organize your answer by paragraph.