Smackey Dog Food

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Worksheet for You Decide Name ____________ Course Code _________ Grade ___/ Date__/__/__ Questions: Q1: Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc. Solution: Chapter 5 Q2: Discuss the essential activities involved in the initial planning of an audit. How do these all specifically to the Smackey Dog Food client? Solution: Chapter 8 Q3: Discuss the 4 stages of the audit and the major activities performed by the auditor in each phase. Give an example of how each of these specifically applies to the Smackey Dog Food, Inc audit. For instance, examine the apparent internal control weaknesses and possible negative outcome of each. Solution: Chapter 6, 13 Q4: Describe Keller CPAs’ responsibilities related to communications regarding internal control matters. What internal controls issues do you identify? Solution: Chapter 10 Q5: You decide that you will address Smackey Dog Food, Inc.’s accounts receivables through confirmations. Discuss the various types of confirmations and what forms you will implement and why. Solution: Chapter 19 Q6: What are the major factors affecting sample size for confirming accounts receivable? Solution: Chapter 16 pg. 535 - Total Population - Tolerable misstatement - Control risk - Types of confirmation Q7: A major issue in verifying the ending balance in property, plant and equipment is the possibility of legal encumbrances. Discuss what specific concern do you have. Describe the procedures your firm will perform to obtain evidence about existing legal encumbrances. Solution: Chapter 19 Who owns the property? Is it pledged? Read the terms of the loan – the credit agreements - Inquire of the client - Start search for own/not owned - Send letters of inquiry to attorney - Search public records for liens - Board of

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