That our audits provide a reasonable basis for our

that our audits provide a reasonable basis for our opinion.
As As described in described in Note Note X, X, the the partnersh partnership’s ip’s policy is policy is to to prepare its prepare its financial statements financial statements on on the the
accounting basis used for income tax purposes; consequently, certain revenue and related accounting basis used for income tax purposes; consequently, certain revenue and related
assets are recognized when received rather than when earned, and certain expenses are assets are recognized when received rather than when earned, and certain expenses are
re recog cogniz nized ed wh when en pa paid id ra rathe ther r tha than n wh when en the the obl obliga igatio tion n is is in incur curred red. . Ac Accor cordi ding ngly ly, , th the e
accompan accompanying finan ying financial stateme cial statements are not i nts are not intended ntended to to present fin present financial po ancial position sition and resul and results ts
of operations in conformity with financial reporting standards. of operations in conformity with financial reporting standards.
In ad In addition, dition, the co the company mpany is is involved involved in con in continuing tinuing litigati litigation rel on relating t ating to o patent patent infring infringement. ement.
The amount of damages resulting from this litigation, if any, cannot be determined at this time. The amount of damages resulting from this litigation, if any, cannot be determined at this time.
In our opinion, the financial statements referred to above present fairly the assets, liabilities, In our opinion, the financial statements referred to above present fairly the assets, liabilities,
and capital of the Vanda & Corona partnership as of December 31, 2014, and its revenue and and capital of the Vanda & Corona partnership as of December 31, 2014, and its revenue and
expenses expenses and cha and changes in nges in its partn its partners’ ers’ capital capital accounts f accounts for the or the year then year then ended, ended, on on the the
income tax (cash) basis of accounting as described in Note X, which basis has been applied income tax (cash) basis of accounting as described in Note X, which basis has been applied
in a manner consistent with that of the preceding year. in a manner consistent with that of the preceding year.
[Sterling & Co.] [Sterling & Co.]
[Date] [Date]
CHAPTER 30 CHAPTER 30
NONAUDIT ENGAGEMENTS: NONAUDIT ENGAGEMENTS:
PROCEDURES AND REPORTS PROCEDURES AND REPORTS
Questions Questions
1. 1. Exam Examples of ples of using “ using “what what has hel has held true i d true in the pa n the past wil st will hold l hold true in the f true in the future: uture:”
(a) (a) eva evalua luatin ting g the colle the collecti ctibili bility ty of of acc accoun ounts ts rec receiv eivabl able e bas based ed on on pas past t col collec lectio tion
history, history,
(b) (b) evalua evaluating inv ting inventor entory obsole y obsolescence o scence on the bas n the basis of past u is of past usage sage patte patterns rns