Audit Program Design Part Iii for Apollo Shoes Essay

In all honesty, to imagine myself in Jon Western’s shoes is very difficult. He was just a normal boy from North Dakota who hasn’t been exposed to raw, inhumane, and mass amounts of deaths in text and photos and is now doing this as a living. I would of taken the information with belief, but always making sure the sources are reliable. The tact I would of taken if I were Western would be emotional. I would want the superiors of action to see how life really is during this genocide and stories of the people who were affected. I would also want them to put themselves in the shoes of the victims.

There are several reasons why AGI should consider Mercury Athletic as an appropriate target for acquisition. First, acquiring Mercury could improve both companies financially. Acquiring Mercury would double AGI’s revenue. Although Mercury’s financial performance has been disappointing, they experienced top line growth of 20% in 2006. Unfortunately, their profitability has been disappointing due to price concessions to big box retailers and an unsuccessful women’s line. Mercury’s (and ultimately AGI’s) profitability could be improved by the synergies of the two companies merging. Synergies within supply chain, operations, research and development, and advertising should all improve Mercury’s EBITDA.

New Balance was founded by William J. Riley in 1906 in the city of Boston. Riley started by making arch supports for customers who had to spend all day on their feet. Over time the building of arch supports led to the creation of his first running shoe in 1925. As part of a local running club, Riley capitalized on an opportunity to improve running shoes of the time and his designs became widely popular. His new running shoes became so popular that by the 1940’s that production spread from running to many other sports. Then the expansion of the manufacturing significantly increased as he realized a need to running shoes with more selection for wider feet, and

3. Substantive tests procedures: The audit team should perform substantive tests on Smackey’s accounting transactions and

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.

Anderson, Olds, and Watershed rely on Apollo Shoes management for the financial statements. In addition, Apollo Shoes management is responsible for internal control over financial reports, ensuring the company complies with applicable laws and regulations, providing all financial records and other related financial information to the firm, and providing a representation letter at the conclusion of the audit confirming management’s

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate (Louwers & Reynolds, 2007). We believe that the audit evidence obtained is sufficient and appropriate to provide a reasonable basis for our opinions.

We designed the Apollo Shoes audit case to introduce students to the entire audit process, from planning the engagement to drafting the final report. Students are asked to assume the role of a veteran of two-to-three “busy” seasons, “in-charging” for the first time. Communication between the students and client personnel and other firm members takes the form of e-mail messages from the engagement partner (Arnold Anderson), the engagement manager (Darlene Wardlaw), an intern (Bradley

[pic]s a senior in a professional services firm, you have been assigned to plan the financial statement audit of a private company named Toy Central Corporation (TCC). In addition, the partner on the engagement has asked you to identify business risks that could adversely affect TCC’s sustained profitability, so that they can be brought to the attention of the company’s board of directors. These tasks will require you to draw on your knowledge of supply chain management, marketing, internal controls, audit assertions, and financial accounting.

Based on the observations and recounts of Mr. Crumpler in accordance with the provided inventory workpapers, it is fairly reasonable to assume that Apollo Shoes’ inventory counts are accurate. Apollo Shoes’ inventory count instructions are sufficient to control for errors and provide for separation of duties, error checking, and prohibit the sale and movement of inventory during their inventory count. Mr. Crumpler noted the amount of shoe boxes per pallet and a recently received shipment of shoes. He also sampled a selection of Apollo Shoes’ count sheets and all of the count sheets matched his counts (note that Crumpler did not indicate how he chose the count sheets and it could be indicative of nonstatistical sampling). Mr. Crumpler also discovered

There are various procedures that could be taken in to account that would, if properly implemented, would have detected the frauds that occurred within the companies. There are many control risks that should have been taking regarding inventory along with preliminary audit strategies for the inventory and substantive test to be done that would have raised many flags during the typical audits as well as in depth ones.

In the early 1980 the consumer electronics industry was growing at an explosive pace. Between the 1981 and 1984 the total sales for the industry doubled. To support increasing sales massive amounts of inventory has to be procured, marked up and sold to consumers. Inventory becomes the biggest asset a retailer has. As part of the audit planning processes the inspection of the inventory system and verification of the actual inventory numbers should have been a priority. Crazy Eddie was able to inflate its financial results by fraudulently altering its inventory counts and was able to conceal these activities from the auditors for several years.

As in the case with Enron, auditors didn’t do their jobs. In this case, the auditing company was Coopers&Lybrant. In order to realize the fraud, Mickey Monus and other had to put all their losses into expense accounts and come up with the way of boosting their asset accounts. They came up with an idea of inflating inventory. This wouldn’t be possible to do if Coopers&Lybrant wouldn’t do their job negligently. As video states, they were the lowest bid on Phar-Mor’s case, so they didn’t want to spend too much money on their audit. As a result, they checks only 4 stores out of 129. Moreover, they told Phar-Mor’s management in advance which stores will be checked.

Another strength of Auditing Alchemy’s internal control system is there extensive amount of check and balances throughout the production process. The organization sets budgeted production goals based on historical cost and usage standards for both the organization as a whole and different product types. Each type of sphere is placed in its respective bin and is tallied; once each sphere has been differentiated and tallied, they are compared against the production budget. The actual sphere production is compared with budgeted production amounts to verify that production was efficiently and effectively performed. Production staff and production manager Jennifer Smith verify that the budgeted and actual production amounts are in agreement. If there is variance between budgeted and actual production, the production manager requires staff to recount actual production to verify that no human or clerical errors have occurred. If the actual inventory count still does not match the budgeted production, then the production tally sheet is handed over to the production manager for

Nike has been creating great iconic sportswear for over five decades. The Nike Swoosh has become a staple for athletes and sneakerheads all over the world. Since 1964, Nike has created some of the best sneakers that not only influenced the sneakerhead culture but change the sneaker game completely. Here are some of the most Iconic Nike Sneakers of all time that any avid collector of prime sneakers would be proud to have in their collection… Yes, now sneakers have become like art, people collect them to show them off with good reason because some of these kicks currently cost obscene amounts that serious sneakerheads will go to the ends of the earth to acquire (if it comes to that).