Case 1 Step 1

Step 1 The accounting reports of any entity should be prepared in such a form that it should not contain any material misstatements and there should not be an y ambiguity in the report preparation. In the current report, we have a company Purchase Point Media Corporation and the report for the first year of operations has been given. e will be chec!ing the report thoroughly for any mista!es or error as posted in the preparation of the report and will identify those mista!es. "rrors Pro$ected Statement of  %et Income &or the first twelve months of operations Safe 'arbor Statement under the private securities litigation act of 1(() Pro$ect statement of net income Corporate ho house #is! +ear Sirs Pro$ Pro$ec ectted Stat Statem emen entt These figures do not include start up and development costs as asic ssum sumpti ptions ons The revenue generation concept

/enerally accepted accounting principles +ecides des to to rem remaain

2ours urs very truly uly

#easons There is no term such as pro$ected statement of net income as the same is not in terms with the accounting term. The financial statements for any entity are prepared in terms of years and not months. Two Two sentence fragments and a spelling error in the given statement

 %ot a conventional accounting term The na name be being a corporate en entity should be be ca capitali*ed The word ris! here is in the singular form which is wrong as per the statement and it should be in the plural form. e never address the report as Sirs, it is always addressed as Sir   gai gain, n, pro$ pro$ec ectted stat tatemen ementt is not not the righ rightt term erm &irstly, &irstly, these figures is not the right term to use in the report and secondly, the start and development costs have a part in the financials of the company and cannot be e-cluded Thee bas Th basiic as assum umpt ptiions ons whi which have have been been ta!e ta!en n in in the the repo report rt shoul hould d  be additionally mentioned in the report It has been mentioned that the revenue will be generated with the  patented displays being installed in the stores which is not the right concept of accounting for revenue. The accounting for revenue as!s for accounting revenues as and when the stores are running on the accrual basis. The statements prepared with generally accepted accounting  principles is not the right term as there is no concept such as generally accepted accounting principles. The st statement that th the co company pany decide cidess to re remain wi with 10, 10,0 0  stores is vague and does not validate here. In the report, we never state any negative statement which gives a bad view for the users who are intended to read the report. 2ours very truly uly is a wrong ong stateme ement to end the letter with and is a wrong statement made here.

Corporate 'ouse

The Corporate 'ouse cannot be a signatory to the letter instead the Companies name should be at the bottom and the name of the  person signing the report on behalf of the company should be addressed above. The company e-pects to ffi- is a wrong word over here as display panels cannot be affi- its display panel affi-ed. It3s a grammatical mista!e &or conservative purposes &or Conservative purposes is a wrong choice of word for the report and is a substance error. morti*ation of the +isplay panel is tangible asset and thus amorti*ation cannot ta!e display panel  place. It3s a substance error and depreciation is the right word. dvertiser is free to renew &ree to renew or discontinue is a wrong choice of word and shows a or discontinue the service grammatical error. The figure of 4.11 is It3s a substance error as figures cannot be conservative based conservative based The e-pense The e-pense is a grammatical error   #eplacement due to This is a grammatical error as the sentence does not ma!e any vandalism regardless of sense. the security Management is currently The word lessen the e-pense is a grammatical error as e-penses are see!ing insurance, which either decreased or reduced. will lessen the e-pense It is estimated that "ffect is a grammatical error present in the statement and it will be vandalism will effect )5 affect. of the display panels 6andalism will occur in The word fashion is apparently wrong and secondly smashing the two different fashions7 unit in some way does not reveal the true nature of the vandalism. first by placing graffiti on Therefore it3s a substance error. the display unit and secondly by smashing the unit in some way. This would mean 100, There is no unit mentioned against the figure and thus a substance would re8uire a error present. replacement panel The company will enter The word longevity does not serve the right purpose here. into a five year contract with each supermar!et chain to ensure longevity for its advertisers The company has allowed The sentence is not complete as it is half measured and not properly for a 1)5 commission to described. The some cases does not complete the sentence.  be paid to the advertiser in the form of a discount or

in some cases paid to their  ad agency of record ith 19 new shores using the Companies advertising system each month and each store have 9 shopping carts in use this results in 90 installation each month It is estimated that advertising will be changed on 8uarterly basis :. ccounting and uditing The accounting functions are as follows dministering monthly  payroll, creditor invoices and e-pense advances This person will be paid 4;, per month This $unior cler! might be a part time accountant initially and later in the second year will be hired full time Salary compensation for this cler! will be 49,  per month in the last 8uarter  In addition, to the estimate of salaries, the will be a cost for the yearend audit to meet the listing re8uirements of regularity  bodies gencies monthly &or simplicity, this cost will be spread evenly over  the four 8uarter  dvertising in maga*ines and periodicals is a ma$or cost but this form of advertising will alert advertisers and their agents to the services  being offered by the company "ntertainment and  promotion mainly covers the cost of ?wining and dining@ advertisement agents and other media  personnel and on occasion seminar>style meetings. Since money must be spend in this area to create a willingness to use the company3s display panels, it is estimated that 41, a month will be allotted. This results in 4A, a 8uarter. Insurance coverage will have to be obtained for general liability, office contents, director3s liability insurance and gross profit protection. The chances of this ever happening is e-tremely remote. Management fee comprises the following individuals

There is no basis of simplicity and thus lac!s substance

The sentence is not complete and shows grammatical errors of ma$or costs, will alert advertisers from the point of report writing

The word wining and dining is not appropriate over here and shows substance error 

Since money must be spend is a wrong sentence and does not serves the purpose of the message. 'ence, a substance error 

The sentence is incomplete and poses a substance threat to the report There is no concept of gross profit protection when it comes to insurance coverage.

The sentence does not serve the purpose and is incomplete in its meaning and thus substance error  The sentence is wrong as fee cannot comprise of individuals

Bmission error in the annual remuneration of 6ice President  Mar!eting as (, instead of (, Bffice and sundry e-penses comprise  photocopying paper, office supplies, envelopes,  binders, coffee, pens and  pencils, computer tapes and paper, postage, filing cabinets, adding machines and other items of lesser dollar value which are normally re8uired in the office Initally, the cost of starting two officesD one in the eastern part of the =nited States and the other in the western part, which will re8uire a greater outlay than in subse8uent months. There the following has  been budgeted by 8uarter  Public relations are a high  priority for management. Public relations firms will  be hired to search for new institutional investors and to prepare the re8uired information to be circulated monthly to current and potential shareholders. The offices will not have to be large in space since limited personnel will be re8uired to mange the

There is a substance error of omission mista!e as the figure is incomplete.

The sentence contains grammatical errors in the form photocopying  paper and others lesser dollar value where it does not serves the message properly.

The sentence is incomplete as it starts off with a different meaning and ends on different meaning. Thus, there is substance error in the sentence

The sentence is wrong and has a grammatical error  The sentence has substance error in the form of high priority for the management as the sentence does not serve the right purpose

There is a grammatical error of spelling mista!e for mange which would be manage.

operations. The building does not have to be class  rating and can be located outside of the busier section of the city. The accountant3s and assistance accountant3s salaries have been covered under ccounting and uditing noted fewer than : above. There are employees other  than the aforementioned7  being two receptionists, two girl &ridays and two account representatives to sell the advertising Bther employees will be hired either on a part time  basis or else as demand re8uires 4 symbol under table Salaries and enefits Said cost is estimated at 41, Therefore, it is anticipated travel costs will be 41, a month for the first 8uarter, increasing by 15 for each the second and third 8uarters. In the last 8uarter it is anticipated travel locally in the =nited States will amount to 4A), per month with the added cost each month of trips to "urope.

Step 9

Class  rating is wrong choice of word in the sentence and such word does not hold place in the reports

The word assistance is wrong and should be assistant and the sentence covered under accounting and auditing is wrong reference.

Two girl &ridays does not reflect any personnel re8uired for wor! and there is no concept of sell the advertising. This shows both grammatical and substance error 

Br else as demand re8uires is wrong statement and does not serve the purpose right

The 4 symbol is missing under the table salaries and benefits and is a minor substance error  The cost is not defined in the estimated costs and there is no lin!age The sentence is incomplete as ?it is anticipated travel costs will be@ and there should be a coma in between and thus a grammatical error 

Travel locally is incomplete and leaves the sentence incomplete as it does not serve the sentence right. It3s a grammatical error

Table 1 s given separately in the e-cel sheet Step A Table 9 s given separately in the e-cel sheet