The main purpose of the cash flow statement is to allow external users to assess the solvency and profitability of the company, to ensure the safety of their investment decisions. This projection can be made for the entire period covered by the business plan but because the date from it is used for making the Balance sheet it is recommended to go gradually year by
As a requirement of the SEC, a publicly traded company must have an annual audit of the financial statements. I would recommend a review of the historical financial statements and it is a lower cost than an audit of financial statement. A review of the financial statements will help me with better understanding of Apollo Shoes with how the company has grown historically and I would give better advice to you on how to continue the
Your Answer: $400 $440 $500 $0 5. Which of the following is not considered "constructive receipt" of income? Your Answer: A payment on a sale of real property was placed in escrow on December 16, 2009, but not received by Ms. B until January 10, 2010, when the transaction was closed. Ms. K was informed her check for services rendered was available on December 16, 2009, but she waited until January 16, 2010 to pick up the check. Earned income of Mr. D was received by his agent on December 30, 2009, but not received by D until January 3, 2010.
The internal auditors questioned why the two shipments were done before December 31, since the requested dates were in the following year. The shipments had a total value of $150,000.00. Another concern for the internal auditors was that there was no written agreement with United Thermostatic Controls to accept the early shipments and pay for them before they actually needed the merchandise. The internal auditors also discovered that Frank Campbell put pressure on the accountants to record the shipments to show the sales. Their concerns were discussed with
The first way to improve working capital is to make the excess liquid funds work for the company. These funds should be invested back into the company. This can be accomplished by reducing long-term liabilities with high interest rates such as the mortgages on facilities. The second is to manage the inventory held by the company. Currently Competition Bikes purchases inventory for production the month before it goes to the production line.
Engagement Letter Anderson, Olds, and Watershed, CPAs October 31, 2007 Mr. Larry Lancaster, President Apollo Shoes, Inc. 100 Shoe Plaza, Shoetown, ME 00001 Dear Mr. Lancaster: This will confirm our understanding of the arrangements for our audit of the financial statements of Apollo Shoes Inc. for the year ending December 31, 2007. We will audit the company’s financial statements for the year ending December 31, 2007, for the purpose of expressing an opinion on the fairness with which they present, in all material respects, the financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. We will conduct our audit in accordance with auditing standards generally accepted in the United States of America. Those
* “a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company; * a statement identifying the framework used by management to evaluate the effectiveness of this internal control; * management's assessment of the effectiveness of this internal control as of the end of the company's most recent fiscal year; and a statement that its auditor has issued an attestation report on management's assessment.” (sec.gov) This is stating management has to take responsibility that they made sure the financial reporting of the company being handed in is correct. They have to explain how and what they have done to assure the financial reports are correct. Management has to get a seal of approval from its auditor agreeing that the financial reports are done properly and there are no mistakes and the necessary steps were taken to attest that the financial statements are correct. This makes management of a company personally responsible things are being done
Financial Accounting auditor’s report – general: According to the comments in the Report of Independent Registered Public Accounting Firm, in this particular case Deloitte & Touche, LLP, they found that the Lowe’s Companies, Inc. and subsidiaries presented consolidated financial statements fairly, in all material respects, and the results of its operations and its cash flows for each of the three fiscal years in the period ended January 28, 2011, in conformity with accounting principles generally accepted in the United States of America. They also audited the internal control over financial reporting of Lowe’s Companies, Inc. based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. In Deloitte’s opinion, they found the Company maintained effective internal control over financial reporting as of January 28, 2011. auditor’s report – internal controls: The Company had an audit over their internal controls, which was again performed by Deloitte. During the audit, it was the responsibility of Deloitte to determine whether the Company’s internal control over financial reporting was effective. The audit was conducted in accordance with the standards of the Public Company Accounting Oversight Board.
Those statements are income statement, retained earnings statement, balance sheet, and statement of cash flows. All of which are reviewed as well to provide a complete understanding of accounting in today’s society. Accounting consists of identifying, recording, and communicating the economic events of an organization to interested users (Jerry J. Weygandt, 2008, p. 4). The purpose of accounting is to keep track of all financial events in the company for the internal users or management to make sound decisions regarding the business and also for external users such as investors
2. Reliability: With moral principles clients are able to rely more on the Accountants. The nature of the work carried out by accountants and auditors requires a high level of ethics. Shareholders, potential shareholders, and other users of the financial statements rely heavily on the yearly financial statements of a company as they can use this information to make an informed decision about investment. They rely on the opinion of the accountants who prepared the statements, as well as the auditors that verified it, to present a true and fair view of the company.