...Running Head: Audit Report Section 404 Week 4: Team Assignment Withley E., Kacie Wooding, Audie McRae, Dena Brown ACC/546 Professor: HILLARY EDMONDSON July 20, 2015 Anderson, Olds, and Watershed United States of America July 20, 2015 Mr. Larry Lancaster Chairman of the Board of Directors, President and CEO Apollo Shoes, Inc. 100 Shoe Plaza Shoetown, ME 00001 Dear Mr. Lancaster, You have requested that we perform a SOX Section 404 consulting engagement. We are pleased to confirm our acceptance and our understanding of this consulting engagement by means of this letter. Our consultancy will be conducted with the objective of our expressing an opinion on the financial statements. This letter provides information and considerations related to our services under the SOX Section 404 consulting engagement, including: 1. Difference between a financial statement audit and an internal control consulting engagement; 2. Significant regulations and guidelines related to audits of internal control; 3. Internal control risks identified within Apollo Shoes, Inc.; 4. Relationship between internal controls and the audit process; and 5. Brief synopsis of auditor’s responsibility in detecting and reporting fraud. 1. Financial Statement Audit vs. Internal Control Consulting Engagement The following information provides details regarding the differences between a financial statement audit and an internal control consulting engagement: Financial...
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...491 Week 4, Learning Team Assignment - Apollo Shoes Case Ass Purchase here http://chosecourses.com/acc-491-week-4-learning-team-assignment-apollo-shoes-case-ass Description ACC 491 Week 4, Learning Team Assignment - Apollo Shoes Case Assignment ACC 491 Week 4, Learning Team Assignment - Apollo Shoes Case Ass Purchase here http://chosecourses.com/acc-491-week-4-learning-team-assignment-apollo-shoes-case-ass Description ACC 491 Week 4, Learning Team Assignment - Apollo Shoes Case Assignment ACC 491 Week 4, Learning Team Assignment - Apollo Shoes Case Ass Purchase here http://chosecourses.com/acc-491-week-4-learning-team-assignment-apollo-shoes-case-ass Description ACC 491 Week 4, Learning Team Assignment - Apollo Shoes Case Assignment ACC 491 Week 4, Learning Team Assignment - Apollo Shoes Case Ass Purchase here http://chosecourses.com/acc-491-week-4-learning-team-assignment-apollo-shoes-case-ass Description ACC 491 Week 4, Learning Team Assignment - Apollo Shoes Case Assignment ACC 491 Week 4, Learning Team Assignment - Apollo Shoes Case Ass Purchase here http://chosecourses.com/acc-491-week-4-learning-team-assignment-apollo-shoes-case-ass Description ACC 491 Week 4, Learning Team Assignment - Apollo Shoes Case Assignment ACC 491 Week 4, Learning Team Assignment - Apollo Shoes Case Ass Purchase here ...
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...Group 1 Apollo 7: Control evaluation and testing in the revenue cycle – evaluate the results of the control testing of the revenue cycle using the materials in the case. Look for patterns in errors that may indicate specific weaknesses over assertions. Refer to chapter materials for basic audit procedures and discussion of how to evaluate the results of your tests based on the preliminary risk assessment. Try to identify trends or specific areas of concern based on the results of control tests that were performed. Some specific trends/areas of concern: * Although Sales went down by 4% Sales Returns increased by 202.39%. * As mentioned in a previous report, the loan to the CEO’s secretary is incorrectly accounted for under Other Receivables. * Apollo sent Mall-Warts an unsolicited order in December even though Mall-Warts had informed Apollo in November that they were going into bankruptcy. * The accounting and control manual has not been kept current. * Customers who are shopping at Apollo’s location are allowed to pick their own orders. * 33% of the errors found were overbilling errors. While the amount is not material, over 70% of the errors occurred a month before the end of a quarter. Also, none of the billing errors were under billing. * Several transactions were missing the bill of lading. * Two invoices out of 51 were found with no information other than the invoice number and overcharge amounts. * 55.82% of sales were made with...
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...Internal Control Questionnaire—Sales Transaction Processing | |Yes, No, N/A | | |Assertions and Questions | |Comments | | | |Occurrence assertion: | | 1. Is the credit department independent of the sales |YES |The credit manager is in treasures office and sales department is| |department? | |in marketing department. | | 2. Are sales of the following types controlled by the |N/A | | |same procedures described below? Sales to employees, COD | |No information available | |sales, disposals of property, cash sales, and scrap | | | |sales. | | | ...
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...------------------------------------------------- Internal Control Questionnaire—Sales Transaction Processing Assertions and Questions | Yes, No, N/A | Comments | Occurrence assertion: | 1. Is the credit department independent of the sales department? | Yes | The credit manager in the treasury department is independent of the salesclerks in the marketing department. | 2. Are sales of the following types controlled by the same procedures described below? Sales to employees, COD sales, disposals of property, cash sales, and scrap sales. | N/A | There is no enough information in this report for this procedure. | 3. Is access to sales invoice blanks restricted? | Yes | The invoices are locked in a closet in the billing department, and sheets in the numerical sequences are removed only for billing clerks’ immediate loading onto the computer printer. | 4. Are pre-numbered bills of lading or other shipping documents prepared or completed in the shipping department? | Yes | They are completed in the shipping department | Completeness assertion: | 5. Are sales invoice blanks pre-numbered? | Yes | The billing clerks produce a four-copy sales invoice on a renumbered invoice form. But sales order documents are not pre-numbered | 6. Is the sequence checked for missing invoices? | No | There is no procedure to check if the sequence is missing invoice numbers but there is a processes to where a shipment is pending until copy $ is received before the order can...
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...Auditing Introduction Letter Lissete Castrillon ACC/546 February 3, 2014 Allan Foster Auditing Introduction Letter Larry Lancaster Apollo Shoes Chairman, President & CEO February 3, 2014 Shoetown, Maine Dear Mr. Lancaster Through the following letter I would like to thank you for trusting our firm AOW in planning your upcoming audit. You are already familiar with the process and what we review during this procedure, like auditing financial statements which include income statements, balance sheets, statements of cash flows and retained earnings. But before we go into these, I would like to give you some information of what our firm has to offer. Some of the services that we provide in our firm are a variety of audits threaded to the need of each company. Operational audits will study specific areas of a company with the sole purpose of measuring its performance; this can be measured by relying on the effectiveness and efficiency of a determined area, for example the sales department. This type of audit will benefit the profitability of a company because it can find the weakest and strongest link of each area. Financial audits which is what we will be doing for Apollo Shoes, entails the auditing of financial statements, the purpose of this type of audit is to ensure that the company is preparing financial statement according to GAAP regulation. It is very important to be compliant with these principals because the information that is given is what investors...
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...Apollo Shoes Letter ACC/546 University Of Phoenix Eric Unum Vice-President-Finance Apollo Shoes Inc. Dear Sir, It is our pleasure to introduce our firm as one with a professional and committed reputation in which proceeds us. Our firm offers exceptional audit and assurance tools, resources, and personnel to provide your company with highest quality of audit and assurance services available. We provide objective, reliable, and comprehensive auditing services, in which our staff of qualified auditors fully comply with. Our assurance programs are specifically designed to meet the needs of your company. We offer program assurance services that monitors and measures your company's system safety program and process to determine its effectiveness. Our firm is respected for our professionalism and commitment to providing high value services to our clients. I am a Certified Public Accountant (CPA) with over seven years of auditing field experience. In my position as the senior audit partner, my role in the audit will be to oversee the entire process. I will also ensure that there is sufficient evidence to check the present controls, test the controls, plan the audit procedures, and assist other parties involved, as needed. At any time during the audit, if any problems emerge you will be immediately notified and kept informed on issues throughout. It will be my responsibility to ensure that all auditors are performing their duties as expected during the entire audit process...
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...Apollo Shoes, Inc. Audit Report The audit firm of Anderson, Olds, and Watershed, CPA (AOW) has been engaged by Apollo Shoes, Inc. to audit the financial statements for the fiscal year ending December 31, 2007, and file the Form 10-k with the SEC within 60 days of this date. It has also been agreed that AOW will prepare the state franchise tax and federal tax returns for Apollo Shoes, Inc. The field work for the audit will begin mid-January, with the trial balance to be sent to AOW shortly after the end of December. The AOW staff assigned to the audit will work closely with Katrina Ramirez, the Internal Auditor for Apollo Shoes. This brief contains additional information regarding the auditing and assurance services offered by AOW that Apollo Shoes may find beneficial now or in the future, an explanation of the role AOW will take on in the aforementioned engagement, and a description of the requirements on AOW to meet the standards for these offered services. Auditing and Assurance Services The management of Apollo Shoes can expect the highest level of service from AOW. AOW offers a variety of assurance and audit services, as well as a variety of accounting services, to meet the financial and accounting needs of its clients. One type of assurance service the company is able to provide is an attestation service “in which the CPA firm issues a report about the reliability of an assertion that is made by another party” (Arens, Elder, & Beasley, 2012, p. 9). These assurance...
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...A.L.A.Y Certified Public Accountants DATE Dear Mrs, Smith: This will confirm our understanding of the arrangements for our audit of the financial statements of Apollo Shoes, for the year ending December 31, 2015. We will audit the Company's balance sheet as of December 31, 2015, and the related statements of income, retained earnings, stockholders equity, and cash flows for the year for the purpose of expressing an opinion on them. The financial statements are the responsibility of the Company management. Our responsibility is to express an opinion on the financial statements based on our audit. We will conduct our audit in accordance with Generally Accepted Auditing Principles (GAAP). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. It will require examination through various tests and evidence supporting the amounts and disclosures in the financial statements. The audit will also include assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit will provide a reasonable basis for our opinion. Although the audit is designed to provide assurance to detect error and irregularities that are material to the financial statements, it is not designed and cannot be relied upon to disclose all fraud or other irregularities. However...
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...October 17, 2011 Mr. Larry Landcaster, President and Chairman Apollo Shoes, Inc. Dear Mr. Landcaster: This letter is to introduce you to our auditing services and other assurance services we offer. In addition to just an audit of your financial statements, we would like to offer and inform you of some of our assurance services. Offers we would like to include with your audit are annual contracts for unlimited attestation services, WebTrust, and a quarterly review of interim financial information. We will audit the consolidated balance sheet of Apollo Shoes, Inc. as of 9/30/2011 and the related consolidated statements of operations, retained earnings (deficit), and cash flows for the fiscal year then ended. Our audits are conducted in accordance with auditing standards generally accepted in the United States and include tests of your accounting records and other procedures we consider necessary to enable us to express such an opinion. At the end of our audits, we discuss any and all findings and indicate so in our opinion letter. If, for any reason, we are unable to complete the audit or are unable to form or have not formed an opinion, we may decline to express an opinion or to issue a report as a result of this engagement. Our annual attestation package is one of our assurance services that allow for your company to bypass individual engagements for specific attestations. For instance, when your financial institution requests a CPA to report in writing whether...
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...Apollo Shoes, Inc. Materiality Memo September 24, 2014 As stated previously we will be following the Generally Accepted Auditing Standards (GAAP) throughout this audit. One of the key components we will be following is the materiality concept. a. As an independent auditor we will determine, by use of professional judgment, the materiality levels to be utilized for the use of this audit. These levels will help us determine what, if any, misstated information in the financial statements is considered material. Any material misstatements located in the financial statements will require an adjusting entry from the client or we will issue a modified opinion. Materiality can be a determining factor for users in making financial decisions, therefore, it is extremely important we provide reasonable assurance the financial statements are without error. However, we will state in our audit report there is some risk the financial statements will contain material misstatements, we cannot guarantee there are no errors. b....
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...June 10, 2013 Larry Lancaster Apollo Shoes, Inc. Shoetown, ME 00001 Dear Mr. Lancaster: This letter is to confirm the understanding of the objectives for the financial statements audit for Apollo Shoes, Inc. We are pleased to perform the financial statement audit for Apollo Shoes, Inc. for the year ending December 31, 2012 and at the end of the audit will provide an opinion of the completeness and fairness of the material presented. This opinion will include the financial position, results of operations, cash flows, and how the information conforms to generally accepted accounting principles in the United States. At this time our audit staff has accepted this engagement, and would like to confirm the audit objectives, terms, and nature of services to be provided for this engagement. The audit will be conducted in accordance with generally accepted auditing standards in the United States and internationally. These standards require our company to plan and perform the audit to obtain assurance the financial information presented in the statements is free from errors or material misstatements whether unintentional or due to fraud. Our firm will provide reasonable, but not absolute assurance within the opinion at the end of the audit. Audits do have an inherent risk of material misstatements existing but escaping the examination of the auditors. This is unavoidable due to the limitations of accounting and inherent limitations of any internal control...
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...Beginning the Audit – Apollo Shoes Anderson, Olds & Watershed, CPAs, LLC Phoenix, AZ 85210 October 15, 2012 Mr. Larry Lancaster Chairman, President & CEO Apollo Shoes 1 Shoeplace Shoetown, Maine 00001 Dear Mr. Lancaster, The Objective and Scope of the Audit of the Financial Statements You have requested that we audit the financial statements of Apollo Shoes Incorporated, which comprise the balance sheet as of December 31, 2012, and the related statements of operations, changes in equity and cash flows for the year end, and the related notes to the financial statements. We are please to confirm our acceptance and our understanding of this audit engagement by means of this letter. Our audit will be conducted with the objective of our expressing an opinion on the financial statements. The Responsibilities of the Auditor We will conduct our audit in accordance with auditing standards generally accepted in the United States of America. The standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material of the financial statements, whether due to fraud or error. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall...
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...Xxxx xxxxxxxxxx March 10, 2015 Mr. Larry Lancaster, CEO Apollo Shoes, Inc. Shoetown, Maine Dear Mr. Lancaster My name is xxxxxxxx. I am the Audit Manager at Anderson, Old, and Watershed, CPAs, LLC. I have been with Anderson, Old, and Watershed, CPAs, LLC little over 10 years. I have provided and continue to provide various auditing and assurances services to our clients. I have extensive background in retail industry. I am writing this letter to confirm our upcoming arrangement with Apollo Shoes and briefly introduce you to our company. Anderson, Old, and Watershed, CPAs, LLC is a nationally renowned firm that offers complete set of services design to help businesses achieve and exceed their business goals. Our services include; * Auditing & Assurance Services * Accounting & Booking Services * Tax Services * Management Services Our firm is one of the leading providers of audit & assurance services in the nation. Within our audit services, we provide operational, compliance, and financial statement audits. As we have discussed previously, we believe that our audit services will be a great benefit to your company. Operational audits study the specific parts of the organization with the purpose of measuring its performance. The overall benefit of these types of audits can positively affect the profitability of the organization. Through our operational audits, at an early stage, an analysis can be performed in order to correct an issue...
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...Engagement Letter Apollo Shoes, This letter is to confirm our understanding of the terms and objectives of our engagement and the nature of the services we will provide. We will audit the consolidated balance sheet of Apollo Shoes as of year end 2007, and the related consolidated statements of operations, retained earnings, and cash flows. The objective of our audit is the expression of an opinion about whether your consolidated financial statements are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit will be conducted in accordance with auditing standards generally accepted in the United States and will include tests of your accounting records and other procedures we consider necessary to enable us to express such an opinion. If our opinion is other than unqualified, we will discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed an opinion, we may decline to express an opinion or to issue a report as a result of this engagement. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, tests of the physical existence of inventories, and direct confirmation of receivables and payables and certain other assets and liabilities by correspondence with selected customers, creditors, and financial institutions. Also, we will plan and...
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