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INDEPENDENT AUDITORSREPORT TO THE BOARD OF
DIRECTORS
ABC COMPANY LIMITED
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INDEPENDENT AUDITORS REPORT TO THE BOARD OFDIRECTORS
ABC COMPANY LIMITED
We have audited the accompanying Balance Sheet of ABC Company
Limited asof December 2006 and the related Statements of ncome and
Statement of Cash !lo"srelated to the current assets# "ith the
accompanying notes# e$pressed in thousand %SDas at &' December
2006( )hese financial statements are the responsibility of
themanagement of the Company( *ur responsibility is to e$press an
opinion of theseannual accounts on the basis of our audit(
+$cept as discussed in the follo"ing paragraph# "e conducted our
audit inaccordance "ith the accounting principles generally
accepted in the %nited States of
America issued by !ASB( )hose standards re,uire that "e plan and
perform the audit toobtain reasonable assurance about "hether the
financial statements are free of materialmisstatement( An audit
includes e$amining# on a test basis# evidence supporting theamounts
and disclosures in the financial statements( An audit also includes
assessingthe accounting principles used and significant estimates
made by the management# as"ell as evaluating the overall financial
statements presentation( We believe that ouraudit provides a
reasonable basis for our opinion(
n our opinion# e$cept for the effects of the Company-s incorrect
determination ofcurrent assets# the financial statement referred to
above# along "ith the e$planatorynotes# "ith respect to the current
assets present a true and fair vie"# in all material
respects# the financial position of the Company as of &'
December 2006# and the resultsof its operations and its cash flo"s
for the year then ended in accordance "ithaccounting principles
generally accepted in .the country "here the report is issued/(
)eam of auditors
Ana Bulgar '12)ibi Bora '12*ana Co3ocaru '11Decebal 4ogea
'15
Andreea atei '16
ay '7th2006
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Notes and findings
'( )rade 8eceivables# 9et
)here is a discrepancy bet"een the Cash !lo" and the Balance
Sheet( )heCash !lo" sho"s an increase of 4!"#$$$ USDbet"een the
year 2006 and 2005#ho"ever# the Balance Sheet records values of
##"%$$$$ USDand &!4%$$$ USD# forthe year 2006# respectively
2005( *ur calculated increase is 44#4$$$ USD( We trac:eddo"n the
mismatch in note ;1 the Cash !lo" did not include the Allo"ance for
doubtfulaccounts(
2( nventories# 9et
According to the Balance Sheet# the Net In'ento(ieshave a
recorded value of&444$$$ USDin the year 2006( 9ote ;5 states
that the nventories consist of Finis)ed
*oods# "ith a value of +&%4$$$ USD# Pa,-aging .ate(ia/s#
"ith a value of +"%$$$USD0 Ra1 .ate(ia/s0 "ith a value of 2"32$$$
USD and Ot)e( in'ento(ies0 "ith avalue of 4$$$$$ USD( )he real
total is in fact &442$$$ USD# and not &444$$$ USDas
recorded in the Balance Sheet< ho"ever this discrepancy is not
material enough tooffer an adverse opinion(
&( *ther Current Assets
)he Cash !lo" sho"s an increase of #!2+$$$ USDfor the year 2006#
ho"ever#the Balance Sheet records C((ent Assets"orth 2#&$$$$
USDin 2006 and #&%2$$$USDin 2005( )he increase should normally
be #4$&$$$ USDand "e see nothing that
could 3ustify that difference(
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Sggestions
)otal Current Assets
)he Auditors suggest a re=recording of the Current Assets
C((ent AssetsBa/an,e
+$$% +$$!
Cash '(2>5(000 %SD '(>56(000 %SD
)rade receivables# net ''(>60(000 %SD 7(516(000 %SD
nventories# net 7(11&(000 %SD 1(576(000 %SD
*ther Current Assets &('70(000 %SD '(76&(000 %SD
Tota/ C((ent Assets 2&(?65(000 %SD '5(?1'(000 %SD
5a/ified O6inion
Although misstatements "ere found# "e do not consider them
material enough tosustain an Adverse *pinion# ho"ever# because they
do not affect the rest of the financialstatements from being fairly
presented "hen ta:en as a "hole# "e sustain a @ualified*pinion(
