Roman Systems Inc.

To: Audit Partner

From: CA

Date: Wednesday, January 18, 2012

Re: Roman Systems Inc. June 30, 2002

The purpose of this memo is to inform you of the findings from the interim audit of RSI as at April 30, 2002 and other matters to be raised at the meeting with the client. In addition, alternate procedures will be recommended for the yearend audit as a result of the issues from the interim audit. Current year’s pretax income has increased from the prior two years almost three to four times which, combined with the client’s intention to publically raise equity, raises questions of occurrence of revenues and completeness of expenses.

RSI implemented a new software package that went live on April 1, 2002. The client is keeping the systems parallel for a month and during our interim audit we discovered several material un-reconciled accounts ($1 million overstated between certain asset and revenue accounts) which suggest we need to test the integrity of the data conversion from the old system to the new system. This needs to be performed to confirm the reliance on the data the new system is producing as this is the platform being used to produce the company’s financial statements. If the new system prompted any changes in the chart of accounts or format of the financial statements, these changes will have to be reconciled to the old accounts and format to ensure comparability of the financial statements. We noted a severe control deficiency in the accounts payable process whereby the controller receives the invoice and is able to authorize payment giving her full authority access over accounts payable. We should suggest Marge to approve all invoices and sign all cheques issued to increase control. Due to this deficiency, we should consider a more substantive approach for the year-end procedures.

In terms of the new software, it seems the client has capitalized several components of the new software including initial review and recommendations for $110K,...