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Peach Blossom Memorandum

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Anderson, Olds, & Watershed
Certified Public Accountants
615 Big City National Bank Building
Main at Michigan Avenue
Chicago, Illinois 60612
Phone: (312) 555-4452
Fax: (312) 555- 9991 www.aowcpa.com December 18, 2009
Peach Blossom Cologne Company
1308 Bee Hive Blvd
Chicago, Illinois 60615
Dear Mr. Kevin Chen,
You have requested that we audit the financial statements of Peach Blossom Cologne Company for 2009, which consist of the balance sheet, income statement, statement change in equity, and cash flow statement for the year. Also, the summary of significant accounting policies and other explanation notes. We are pleased to confirm our acceptance and our understanding by means of this engagement letter. We are responsible for the objectivity …show more content…
These standards require us to abide by the ethical requirements and plan and execute the audit to obtain reasonable assurance whether the financial statements are free from material misstatement, whether due to fraud or error.
An audit consists of gathering audit evidence, the calculation of audit risks, the assessment of appropriate accounting policies used, as well as evaluating the overall financial statements. As the test nature and inherent limitations of an audit, some risk exists unavoidably, even some material misstatements might remain in our audit.
In order to set up accurate audit procedures, we will assess Peach Blossom’s internal controls related to the financial statements. When we finish, we will provide a written communication regarding all internal control deficiencies, significant deficiencies, and material weaknesses discovered.
 Our responsibility includes forming and expressing an opinion on the financial statements that have been prepared by management with the oversight of those charged with governance and that such an audit does not relieve management and those charged with governance of their …show more content…
If there is evidence that fraud or possible noncompliance with laws and regulations may have occurred, we will bring such matters to the attention of the appropriate level of management. If we become aware of any fraud involving management or fraud involving employees who have significant roles in internal control or others where the fraud results in a material misstatement of the financial statements, we will report this matter directly to those charged with governance. We will communicate with those charged with governance matters involving non-compliance with laws and regulations that come to our attention unless they are clearly

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