Audit Engagment Letter

Scoping and Evaluation Judgments in the Audit of Internal Control over Financial Reporting 12.1 EyeMax Corporation . . Evaluation of Audit Differences

The auditor must assess the transactions for how much of a risk factor is involved. When reviewing these transactions, auditor must be able to review the internal controls of the company’s accounting personnel. The segregation of duties is associated with the safeguarding of an organization 's assets and the topic known as internal control. An example of the segregation of duties would be a company 's requirement that the bank statement for its checking

1) Prepare common-sized balance sheets and income statements for Just for Feet for the period 1996-1998. Also, compute key liquidity, solvency, activity, and profitability ratios for 1997-1998. Given these data, comment on what you believe were the high-risk financial statement items for the 1998 Just for Feet audit.

This course is the first in a two-part series that deals with auditing a company 's financial reports, internal controls, and

Read the auditor’s report included in the annual report of the company and explain its purpose. Identify the name of the auditing firm.

The following memo aims to outline the results of the audit of Apollo Shoes, give recommendations to improve the company’s operations, and provide justification for our qualified opinion.

Accounts Receivable, Other Receivables, Allowance for Doubtful Accounts, Bad Debt ExpenseInventories and Reserve for Inventory Obsolescence

To conduct the audit, the firm must acquire sufficient understanding of the internal control processes to help determine the nature and timing of the audit. However, the audit is not designed to identify deficiencies in internal control or provide assurance. The firm will make the audit committee aware of any significant deficiencies that come to Anderson, Olds, and Watershed’s attention during the audit.

Elder, A. A., Beasley, M., & Elder, R. J. (2014). Auditing and assurance services (15th ed.). Upper Saddle River, NJ: Pearson.

Our firm Assurance service is performed by our professional CPAs, possessing the goal of improving Apollo Shoes financial information or the contest of the financial information so that management decision-making can make more informed and making better decisions. Our CPAs provide professions and independent opinions that reduce the information risk that will come from incorrect information. Our professional CPAs performing the audits are

However, as said auditor is not “actively” responsible after auditor’s report has been issued unless the conditions are satisfied.

1235 Winner 's Road Write City, IN 12354 DONALDSON AND LUCIER, LCC has conducted an audit of Apollo Shoes, Inc. balance sheets, the retained earnings, cash flows, and other related statements of income for the year ended December 31, 2006/2007. Apollo Shoes Inc management is responsible for maintaining the effective internal controls that goes along with the financial statements and how well the accuracy is going to be. Donaldson and lucier, LLC has evaluated the effectiveness of the said controls and with everything to see the relevance in the timing, the substantive in quality, and the comprehensive in nature. The responsibility of our firm is to express an opinion that is supported by audit evidence in regards to the accuracy of the Apollo Shoes, Inc. financial statements. Our firm has conducted all audit related services that is accepted by the United States and the generally accepted auditing standards. The planning and performance done ensures that the audit was done to execute and obtain reasonable assurance that the financial statements published by Apollo Shoes, Inc. are free and clear of material misstatement. It is going to include the examination of the evidence and/or the supporting documentation for the amounts that are disclosed and included

Auditors have the responsibilities as well as management to report internal controls. The auditors must examine closely management’s claim of effectiveness and also physically test the controls. After the examination, the auditors should express their opinion and any recommendations to fix any internal control weaknesses.

Performing internal tests of controls is intended to assess the operating effectiveness of those internal controls. Here the staff would select an area of control to test, perhaps inventory management and return policy. They would then look at the procedures that help prevent fraud or error, talk to management, and observe activities. They would notice there is very little control in place for this area. There is no management oversight or dock security measures, no direct recording of sales receipts, shipping labels, or matching to accounts receivable. This would be noted as an area of additional concern. The next stage is to perform substantive testing procedures, where the purpose is to collect audit evidence that the management assertions made in the financial statements are reliable and in accordance with GAAP. Since my staff is good, they would have noticed the company’s sales projections are weak in control and are overstated by around 11%. They would perform a substantive test of detail in this area by selecting a sample of items from the account balances and finding bank statements, invoices, and test of details of balances. They would likely see specifically where the over-projections are being made. Lastly, in finalization, they would compile a report to management detailing any important matters, evaluating the audit evidence, and considering the type of audit opinion that should be reported. Specifically here, they would

When testing of internal controls indicates that there may be significant deficiencies, then the auditor