Apollo Shoes Audit Engagement Essay

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May 21, 2012 Darlene Wardlaw Apollo Shoes 100 Shoe Plaza Shoetown, ME 00001 Dear Ms. Wardlaw: This letter is to confirm our understanding of the arrangements for our audit of the financial statements of Apollo Shoes for the year ending December 31, 2011. We will audit the company’s financial statements for the year ending December 31, 2011, 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 generally accepted accounting principles (GAAP) in the United States. Under GAAP, it is required that we obtain reasonable, assurance that the financial statements are free of material misstatement. Under GAAP, it is not required that assurance be absolute. We will look for material misstatement such as accidental or intentional untrue financial statement information that influences a company’s value or price of stock, caused by error or fraud. However, a material misstatement may remain undetected. In addition, the audit is not designed to detect error or fraud that is immaterial to the financial statements. If we are unable to complete the audit or are unable to form or have not formed an opinion, we may decline to express an opinion or decline to issue a report as a result of the engagement. The audit is not designed to provide assurance on internal control, or to identify significant deficiencies. However, the audit does include obtaining an understanding of internal control sufficient to plan the audit and to determine the nature, timing, and extent of audit procedures to be performed. We are responsible for ensuring that the audit committee is aware of any significant deficiencies that come to our attention. The financial statements are the responsibility of the company’s management. Management is also

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