Essay on Notes on Apollo Shoes Audit Case

Inventory Method: The inventory amount for the year ended 12/31/2016 is $14,760,000,000 which is an $759,000,000 increase from the previous year. CVS uses the lesser of the weighted average cost or market value when determining the value of inventory. Inventory is verified for accuracy by regularly doing physical counts in all locations. Between physical counts, CVS uses sales results from previous years to accrue the estimated physical loss. These estimates are determined for each individual store and warehouse separately to ensure the most accurate information possible is reported. CVS has decided to use a new method available after annual periods beginning after 12/15/2016 known as the lower of cost and net realizable value to replace using

The process requires Peyton Approved to discover how much inventory is sold and what the cost of goods will result in. The process requires the business to review three forms of merchandise inventory to determine which summary benefits the business’s operational behavior. One will discover when assuming that first inventory purchased by the store is the first to be sold, it is determined that the FIFO method displays the best financial outcome for the business. During the process of updating journal entries, one must enter the information proved appropriately into the T-accounts to add the balance under each record. Once the T-accounts for transactions and adjusted transactions are balanced, the next step is to enter the information provided on the balance sheet. The balance sheet will list Peyton Approved assets, liabilities and stockholders equity after added during the T-account process (Nobles, 2014). Once the balance sheet is completed the income statement, statement of retained earnings, and closing entries can be filled with the information proved. This will give the business a full review from journal entry to closing entries of the business for the six month accounting

Planning and developing audit methodologies for Financial & Operating Audits such as contracts and Procurements, accounts payable, inventory management, petrochemicals co-ordination, Fixed Assets, Budgeting, & Financial resource management.

in order to obtain stronger or more persuasive evidence, the “bank balance” reported by the

I would discuss with the supervisor and coworkers about how much percentage of the inventory should be valuated so that auditors can conclude that the inventory has no material discrepancies. And also, I will negotiate with the client in order to have a little more time to finish required valuation of inventory. Since I believe that providing unqualified and faithfully represented financial reports is an essential mission of an accounting firm, and that the investors and governmental authority consider CPAs and auditors should be responsible for the quality of financial reports (the punishment is quite harsh for not doing a good job), I would intend to sacrifice more time and costs for more accurate financial information.

The firm of Anderson, Olds, and Watershed is pleased to receive your notification to proceed with the audit and look forward to working with you. From the Audit Committee meeting minutes, we understand that Apollo Shoes requires help with the yearly audit because the former CPA firm withdrew unexpectedly (University of Phoenix, n.d.). Anderson, Olds, and Watershed will conduct the audit and “prepare the state franchise tax returns as well as the federal tax returns” (University of Phoenix, n.d., p. 9). Because of Apollo’s previous work with Smith and Smith, Anderson, Olds, and Watershed is “required by auditing standards to communicate with” Smith and Smith (Arens, Elder, & Beasley, 2012, p. 212).

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

Arens, A. A., Elder, R. J., & Beasley, M. S. (2013). Auditing and Assurance Services. Old Tappan, NJ: Pearson Education.

|Develop Audit programs for the substantive audit procedures for the balance sheet and income statement |35 |

The options available for this company involve looking at different inventory models in order to allow this specialist the ability to produce outside high demand windows of opportunity. Initially this company began using the MRP system which enevitably helped to reduce the company’s inventory and at the same time improved their on-time delivery numbers. Currently the process has allowed the Space Age company to maintain a cost of $1.25 per week to store their Gemnini and $1.50 per week to store each of their Saturns that sat in inventory.

Trace items returned to the receiving report, taking note of quantity and date received (S‑4).

2) Current inventory level – Every few days, Mr. Watkins performs a detailed analysis of inventory. He looks for trend that could establish larger-volume buying or reduction in inventory that the MRP action report would not recommend. There are times when volume discounts apply and he consults with the CFO of SSC to determine what the most profitable alternative is for SSC. The decisions are always made by Mr. Watkins and the CFO.

Nike subcontracts the production process of its footwear to 900 contract factories located worldwide with Asian developing countries such as China, Indonesia and Vietnam accounting for the bulk of total world production. Production of the footwear is based on a vertically integrated model. In the primary stage, raw materials such as rubber, leather and plastic are extracted from places located in close proximity from the factories. In the secondary stage, the extracted resources are sent to the factories or “Sweatshops” for manufacturing. It should be noted that the whole production process of Nike footwear are being carried out by independent private contractors.

The sampling plan in the design of controls does not provide tests about revenues and accounts receivables. The weakness that I could see is the fact that goods that were delivered to customers were not billed which result in bill of lading not being pre-numbered. Because of this, bills of lading do not count as an effective sampling unit. For a successful audit, auditors need to evaluate orders randomly and check to see if the goods were shipped and the customers received invoices prior to the receipt of the product, Therefore in this case, existence/occurrence is the course of action for the auditors.

* Assign the days-of-inventory (DOI) metric to staff members responsible for buying materials for each value stream. Buyer should focus on improving the pull and flow of inventory and on reducing inventory levels. A reduction in days of inventory is much easier to see rather than a one-tenth of a point improvement in a site inventor turn under traditional measurement systems. Using DOI metric at the value stream level, buyers begin to see how their actions on reducing inventory result in actual improvement of inventory level.