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 #easons
Pro$ected Statement of There is no term such as pro$ected statement of net income as the
 %et Income same is not in terms with the accounting term.
&or the first twelve The financial statements for any entity are prepared in terms of
months of operations years and not months.
Safe 'arbor Statement Two
Two sentence fragments and a spelling error in the given statement
under the private
securities litigation act of
1(()
Pro$ect statement of net  %ot a conventional accounting term
income
Corporate hohouse The na
name bebeing a corporate en entity should bebe ca
capitali*ed
#is! The word ris! here is in the singular form which is wrong as per the
statement and it should be in the plural form.
+ear Sirs e never address the report as Sirs, it is always addressed as Sir  
Pro$
Pro$ec
ectted Stat
Statem
emen
entt gai
gain,n, pro$
pro$ec
ectted stat
tatemen
ementt is not
not the righ
rightt term
erm
These figures do not &irstly,
&irstly, these figures is not the right term to use in the report and
include start up and secondly, the start and development costs have a part in the
development costs financials of the company and cannot be e-cluded
as
asic ssum
sumpti
ptions
ons Thee bas
Th basiic as
assum
umptptiions
ons whi
which have
have been
been ta!e
ta!enn in
in the
the repo
report
rt shoul
hould
d
 be additionally mentioned in the report
The revenue generation It has been mentioned that the revenue will be generated with the
concept  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.
/enerally accepted The statements prepared with generally accepted accounting
accounting principles  principles is not the right term as there is no concept such as
generally accepted accounting principles.
+ecides
des to
to rem
remaain The st
statement that th the co
company
pany decide
cidess to re
remain wiwith 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
urs very truly
uly 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 The sentence is incomplete as there is bro!en message in the
using the Companies sentence. This is a grammatical error as well as substance error 
advertising system each
month and each store have
9 shopping carts in use
this results in 90
installation each month
It is estimated that The word changed is wrong and it should be charged and hence a
advertising will be grammatical error 
changed on 8uarterly basis
:. ccounting and hich accounting functions are missing from the sentence and thus
uditing The accounting substance error 
functions are as follows
dministering monthly dministering is the wrong word and shows grammatical error 
 payroll, creditor invoices
and e-pense advances
This person will be paid The person is not mentioned and thus shows the substance error.
4;, per month
This $unior cler! might be This is a substance error in the report as the $unior cler! cannot be a
a part time accountant  part time accountant as both are two different things entirely
initially and later in the
second year will be hired
full time
Salary compensation for Substance error as the sentence is not defined properly.
this cler! will be 49,
 per month in the last
8uarter 
In addition, to the estimate /rammatical error of comas and the sentence being incomplete.
of salaries, the will be a
cost for the yearend audit
to meet the listing
re8uirements of regularity
 bodies
<easing top 1 The sentence does not ma!e any sense and there is no proper
dvertisement gency direction
maga*ines in the =nited
States which speciali*e in
the food and grocery
industry and are
 distributed to the top d>
gencies monthly
&or simplicity, this cost There is no basis of simplicity and thus lac!s substance
will be spread evenly over 
the four 8uarter 
dvertising in maga*ines The sentence is not complete and shows grammatical errors of
and periodicals is a ma$or ma$or costs, will alert advertisers from the point of report writing
cost but this form of
advertising will alert
advertisers and their
agents to the services
 being offered by the
company
"ntertainment and The word wining and dining is not appropriate over here and shows
 promotion mainly covers substance error 
the cost of ?wining and
dining@ advertisement
agents and other media
 personnel and on occasion
seminar>style meetings.
Since money must be Since money must be spend is a wrong sentence and does not
spend in this area to create serves the purpose of the message. 'ence, a substance error 
a willingness to use the
company3s display panels,
it is estimated that
41, a month will be
allotted.
This results in 4A, a The sentence is incomplete and poses a substance threat to the
8uarter. report
Insurance coverage will There is no concept of gross profit protection when it comes to
have to be obtained for insurance coverage.
general liability, office
contents, director3s
liability insurance and
gross profit protection.
The chances of this ever The sentence does not serve the purpose and is incomplete in its
happening is e-tremely meaning and thus substance error 
remote.
Management fee The sentence is wrong as fee cannot comprise of individuals
comprises the following
individuals
 Bmission error in the There is a substance error of omission mista!e as the figure is
annual remuneration of incomplete.
6ice President 
Mar!eting as (,
instead of (,
Bffice and sundry The sentence contains grammatical errors in the form photocopying
e-penses comprise  paper and others lesser dollar value where it does not serves the
 photocopying paper, office message properly.
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 The sentence is incomplete as it starts off with a different meaning
two officesD one in the and ends on different meaning. Thus, there is substance error in the
eastern part of the =nited sentence
States and the other in the
western part, which will
re8uire a greater outlay
than in subse8uent
months.
There the following has The sentence is wrong and has a grammatical error 
 been budgeted by 8uarter 
Public relations are a high The sentence has substance error in the form of high priority for the
 priority for management. management as the sentence does not serve the right purpose
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 There is a grammatical error of spelling mista!e for mange which
to be large in space since would be manage.
limited personnel will be
re8uired to mange the
 operations.
The building does not Class  rating is wrong choice of word in the sentence and such
have to be class  rating word does not hold place in the reports
and can be located outside
of the busier section of the
city.
The accountant3s and The word assistance is wrong and should be assistant and the
assistance accountant3s sentence covered under accounting and auditing is wrong reference.
salaries have been covered
under ccounting and
uditing noted fewer than
: above.
There are employees other  Two girl &ridays does not reflect any personnel re8uired for wor!
than the aforementioned7 and there is no concept of sell the advertising. This shows both
 being two receptionists, grammatical and substance error 
two girl &ridays and two
account representatives to
sell the advertising
Bther employees will be Br else as demand re8uires is wrong statement and does not serve
hired either on a part time the purpose right
 basis or else as demand
re8uires
4 symbol under table The 4 symbol is missing under the table salaries and benefits and is
Salaries and enefits a minor substance error 
Said cost is estimated at The cost is not defined in the estimated costs and there is no lin!age
41,
Therefore, it is anticipated The sentence is incomplete as ?it is anticipated travel costs will be@
travel costs will be and there should be a coma in between and thus a grammatical error 
41, a month for the
first 8uarter, increasing by
15 for each the second
and third 8uarters.
In the last 8uarter it is Travel locally is incomplete and leaves the sentence incomplete as
anticipated travel locally it does not serve the sentence right. It3s a grammatical error
in the =nited States will
amount to 4A), per
month with the added cost
each month of trips to
"urope.

Step 9
Table 1

s given separately in the e-cel sheet

Step A

Table 9

s given separately in the e-cel sheet