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
The operational audit studies the specific parts of an organization with the purpose of measuring its performance. Performances are measured in terms of effectiveness and efficiency such as auditing shipping and receiving or the sales departments. The benefit of these types of audits can positively affect the profitability of the organization. The financial audits, which we are doing, consist of auditing financial statements. The purpose of the financial statement audit is to ensure the entity being audited is preparing the financial statements in conformance with General Accepted Accounting Principles (GAAP).
The audit report must show report that management has established and maintained internal controls for financial reporting. Certification of each annual report must be verified by the executive offers of the company, the report must show that they maintained established internal controls. The offices of the company must include in their reports evaluation of the internal controls effectiveness. Included in the reports, there must be reports of fraud that may have an effect that have any effect on the internal controls. The Sarbanes-Oxley Act contains 11 titles that describing rules and requirements for financial reporting in the United States (Wang,
The financial statement audit is the one I will be concentrating on by examining the financials to be sure Apollo Shoes in compliance with the required US accounting standards. I will match the evidence with various accounts, analyzing vendor and customer accounts, payroll and employee benefits, and bank accounts. I will want to analyze the cash flow statements with the supporting evidence, along with the balance sheet, and income statement or profit and loss
When conducting an audit, one must develop a concrete understanding of a business and the type of environment the business operates in. The auditor must examine all the elements that make up the business and that also must include an understanding of the company’s internal controls. Once the auditor has a genuine understanding of the business; the auditor will establish material information, and create a series of procedures for the audit. In the instance of Apollo Shoes, an audit was conducted on the financial reports, the sales and collection cycle, and the payroll and personnel cycle. The final step of an audit design program would be to audit Apollo Shoes’ inventory and warehousing cycle and the cash cycle.
The notes to the financial statements provide basic details about the statements, on the Marriot International, Inc’s 10-K provided detailed & extensive notes. These notes explain important aspects not shown with financial numbers and calculations, allowing investors to fully understand the reasons for certain strategies taken by the company. Notes
January 7, 2014 Board of Directors Apollo Shoes, Inc. 100 Shoe Plaza Shoetwon, ME 00001 Team A is pleased to affirm our understanding of the services we will provide Apollo Shoes Inc. for the year ended December 31, 2013. We are responsible for auditing the statement of financial position of Apollo Shoes Inc. as of December 31, 2013, including the related statements of activities and cash flows for the year then ended. In addition, our audit team will examine information accompanying the financial statements in accordance with auditing procedures applied in our audit of the financial statements and certain related additional procedures. This may include; but is not limited to, comparing and reconciling information directly related to the underlying accounting, various documents used in preparing the financial statements, and any additional procedures necessary in accordance with auditing standards generally accepted in the United State of America. Additionally, our responsibility as auditor is limited to the period covered by our audit and does not extend to any other periods for which we are not engaged as auditors.
Our operational audit will evaluate the efficiency and effectiveness of Apollo Shoes’ operating procedures and methods (Arens, Elder, & Beasley, 2012, p. 13). Our compliance audit will determine if Apollo Shoes is “following specific procedures, rules, or regulation set by some higher authority” (Arens, Elder, & Beasley, 2012, p. 14). And our financial statement audit will determine if Apollo Shoes’ financial statements are stated in accordance with specified criteria, such as U.S. or international accounting standards (Arens, Elder, & Beasley, 2012, p. 14). As a Senior Auditor, I am responsible for and will coordinate all the audit fieldwork, including supervising staff work. Our audit team follows Generally Accepted Auditing Standards, which have three main categories: general standards, standards of fieldwork, and reporting
The audit for the financial statements will include evidence supporting amounts and disclosures in statements, examining, accounting principles used assessment, estimates made by management, evaluating all of the financial statements overall. The internal control over financial reporting audit will be acquiring an understanding of internal control over financial reporting, evaluating and testing the design and operation of the effectiveness of internal control and conducting procedures as necessary. The internal control over financial reporting within a company is meant to provide a reasonable assurance as to the reliability of financial reporting and for the preparation of the financial statements for external purposes in accordance to the generally accepted accounting principles
To: Apollo Shoes, Inc. Dear: Management As promised, I have set out below a description of the services that I will provide to you together with a suggested fee proposal. I will provide the following services: auditing of the financial statements of Apollo Shoes, Inc. for two years. This would include the balance sheet, statements of income, comprehensive income, stockholder’s equity, and cash flow for the year ended for the years 2010, for the purpose of expressing an opinion on them. I also provide auditing on the internal controls and maintaining affective internal controls based on the established criteria, Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO criteria), the