Beginning the Audit Report
Veronica Hemphill
University of Phoenix
ACC/546
July 9, 2012

Hemphill Financial Madison, Alabama 35758
July 9, 2012
Mr. Larry Lancaster President, Apollo Shoes 2501 Alabama Lane Phoenix, AZ 35404
Dear Mr. Lancaster: This will confirm our understanding of the arrangements for our audit of the financial statements of Apollo Shoes Inc. for the year ending December 31, 2012. We will audit the company’s financial statements for the year ending December 31, 2012, for the purpose of expressing an opinion on the fairness with which they present, in all material respects, the financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. We will begin the audit process upon reviewing the financial statements, organizational charts, and 2009-2011 federal and state income tax returns. Once the information is carefully reviewed, we will conduct a risk workshop primarily to identify key risks and raise risk awareness, draft an audit plan, and schedule an opening meeting. The opening meeting should include senior management and any administrative staff that may be involved in the audit. During this meeting, the scope of the audit will be discussed. You should feel free to ask the auditors to review areas that you are concerned about. The time frame of the audit will be determined, and you should discuss any potential timing issues that could impact the audit. After the opening meeting, the auditor will finalize the audit plan and begin fieldwork. Fieldwork typically consists of talking with staff, reviewing procedure manuals, learning about the business processes, testing for