INDEPENDENT AUDITOR’S REPORT

Melizamia W. Lanson
Certified Public Accountant
CAINATORS Auditing Firm
October 11, 2023

To the Shareholders and Directors of Kakashi Corporation

Auditor’s Opinion on the Validity of Change in Accounting Estimate Disclosure

We have audited the consolidated and comparative financial statements of Kakashi
Corporation for the years ended December 31, 2021, and 2022, and have conducted our
audit in accordance with the International Standards on Auditing. Our audit was designed to
obtain reasonable assurance regarding the financial statements' accuracy and fairness.
During the course of our audit, we identified a significant matter that, in our professional
judgment, affects the financial statements' reliability. Specifically, the client has included a
note in the financial statements disclosing a change in accounting estimate. After thorough
examination and evaluation, we have determined that this change in accounting estimate is
invalid and not in compliance with the relevant accounting standards.

Basis for Qualified Opinion

Upon review, we found that the change in accounting estimate disclosed by the client does
not appear to be valid based on the available information and documentation. The change in
estimate does not meet the criteria outlined in relevant accounting standards, including those
related to the necessity for a change due to new information, events, or circumstances.
As a result, we are unable to obtain sufficient appropriate audit evidence to support the
validity of this change in accounting estimate. This raises doubts about the reliability of the
financial statements, specifically with regard to the change in estimate, and the potential
impact on the overall financial position and results of operations of Kakashi Corporation for
the year 2022.
In light of the above, we are unable to express an unqualified opinion on the consolidated
and comparative financial statements of Kakashi Corporation for the years ended December
31, 2021, and December 31, 2022.

Key Audit Matters

In conducting the audit of Kakashi Corporation's consolidated and comparative financial
statements for the years ended 2021 and 2022, a significant key audit matter arises
concerning the validity of a noted change in accounting estimate. The client has indicated a
change in accounting estimate in their financial statements, necessitating a thorough
assessment to ascertain its validity and appropriateness in accordance with applicable
accounting standards. Our audit, in alignment with PSA, involves evaluating the justification
and compliance with relevant accounting principles, determining the reasonableness and
consistency of the change, assessing the impact on prior periods, and evaluating
management's disclosure of the change in estimate. The audit procedures and evaluations
of this key matter are pivotal to providing assurance on the accuracy, fairness, and
transparency of the financial statements, reflecting our commitment to delivering a high-
quality and reliable audit opinion.

Responsibilities of Management and Those Charged with Governance for the

Consolidated Financial Statements
The responsibilities of management and those charged with governance for the consolidated
financial statements of Kakashi Corporation for the years ended 2021 and 2022 are
significant. Management holds the primary responsibility for the preparation, presentation,
and fair representation of the financial statements. This encompasses the selection of
appropriate accounting policies and estimates, as well as the overall design, implementation,
and maintenance of internal control systems.
Furthermore, those charged with governance, which typically includes the Board of
Directors, Audit Committee, and other relevant oversight bodies, have a vital role to play.
They are responsible for overseeing the financial reporting process and ensuring that it
aligns with applicable accounting standards and regulatory requirements. This includes the
evaluation of significant accounting estimates and changes therein. In the case of a noted
change in accounting estimate that is deemed invalid during the audit, those charged with
governance must engage in a dialogue with management to address the issue and ensure
that the financial statements accurately reflect the company's financial position.
In summary, the responsibilities outlined in PSA underscore the critical roles of both
management and those charged with governance in maintaining the integrity and
transparency of Kakashi Corporation's consolidated financial statements. These
responsibilities are paramount to fostering trust among stakeholders and ensuring
compliance with accounting standards and regulations.

Auditor’s Responsibilities for the Audit of the Consolidated Financial

Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with PSAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these consolidated financial statements.
As part of an audit in accordance with PSAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
 Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
  Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
 Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.
 Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervision
and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the consolidated financial statements of
the current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

In accordance with Audit Report PSA 700, based on our audit of the consolidated and
comparative financial statements of Kakashi Corporation for the years ended 2021 and
2022, it is our professional judgment that a change in accounting estimate noted by the client
is invalid. We have carefully assessed the appropriateness and validity of this change and
found it inconsistent with established accounting principles and guidelines. As auditors, we
cannot concur with the client's proposed change in accounting estimate, and we will further
engage with the client to rectify this discrepancy and ensure compliance with relevant legal
and regulatory requirements. This disagreement has been appropriately disclosed and
explained within our audit report to maintain transparency and accuracy in the reporting
process.
Sincerely,
Melizamia W. Lanson
Certified Public Accountant
CAINATORS Auditing Firm