Accounitng Essay

1065 WordsJan 28, 20125 Pages
Audit Program Design - Part I Engagement Letter UOPX AUDITING AND ASSURANCE SERVICES Elk Grove, CA 95757 January 15, 2012. Mr. Larry Lancaster, President and CEO Apollo Shoes Inc. 100 Shoe Plaza Shoetown, ME 00001 To: The Board of Directors and Shareholders of Apollo Shoes, Inc. This letter will confirm our understanding of the arrangements for our audit of your internal controls and financial reporting, or the ICFR audit as defined under section 404 of the Sarbanes Oxley Act. In this audit, we will analyze the risk undertaken by the company from a top-down perspective. The major regulations that we are looking to fulfill are as follows: * Analyze and asses the structure and practice of the internal controls relating to accounting and risk statements in public reports; * Fraud risk assessment and examine fraud prevention controls; * Analyze the ways transactions occur in the company to determine potential problems; * Evaluate the methods in which financial reports are compiled and generated; * Asses how the factors of company size and complexity affect risk potentials; and * Make a determination of areas in need of improvement and overall adequacy of the company’s internal controls and financial reporting accuracy. The control structures in place in many corporations today tend to follow the guidelines as set out by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO framework, as it is commonly known. It is important to ensure the regulations are followed closely both for legal reasons, and for cost savings reasons. The SarbOx rules tend to help a corporation focus on efficiency and transparency in accounting, and this helps a company maintain a cost effective structure as well. We look forward to engaging with you shortly on this project. COSO states, “ that internal control over

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