The following audit report was drafted by a staff accountant ofTurner & Turner, CPAs, at the completion of the audit of the financialstatements of Lyon Computers, Inc. (a public company) for the yearended March 31, 2014. It was submitted to the engagement partner,who reviewed matters thoroughly and properly concluded that Lyon’sdisclosures concerning its ability to continue as a going concern for areasonableperiod of time were adequate, but there is substantial doubtabout Lyon being a going concern. Identify the deficiencies containedin the audit report as drafted by the staff accountant. Group thedeficiencies by paragraph. Do not redraft the report.
To the Board of Directors of Lyon Computers, Inc.:
We have audited the accompanying balance sheet of Lyon Computers,Inc. as of March 31, 2014, and the other related financial statementsfor the year then ended. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with standards that requirethat we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are in conformity with generallyaccepted accounting principles. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principlesused and significant estimates made by management.
The accompanying financial statements have been prepared assumingthat the Company will continue as a going concern. As discussed in NoteX to the financial statements, the Company has suffered recurring lossesfrom operations and has a net capital deficiency that raises substantialdoubt about its ability to continue as a going concern. We believe thatmanagement’s plansin regard to these matters, which are also describedin Note X, will permit the Company to continue as a going concern beyonda reasonable period of time. The financial statements do not include anyadjustments that might result from the outcome of this uncertainty.
In our opinion, subject to the effects on the financial statements of suchadjustments, if any, as might have been required had the outcome of theuncertainty referred to in the preceding paragraph been known, the financialstatements referred to above present fairly, in all material respects,the financial position of Lyon Computers, Inc., and the results of its operationsand its cash flows in conformity with generally accepted accountingprinciples applied on a basis consistent with that of the preceding year.
Turner & Turner, CPAs
April 28, 2014
