...Beginning Audit Process Anderson, Olds, & Watershed, CPAs August 13, 2012 Larry Lancaster Apollo Shoes, President 444 Primrose St New York, New York 12345 Dear Mr. Lancaster: Greetings! This letter is to confirm our understanding of our engagement of the approaching auditing process for Apollo Shoes, Inc. Our firm is delighted to carry on the work with Apollo Shoes, Inc. and complete the assessment for the year ending on December 31, 2011. Our team associates would like to attest the audit objectives, terms, limitations, and various services provided for this engagement. Our services will include auditing financial statements such as income statement, balance sheets, statement of retained earnings, and the statement of cash flows. The financial audits will make sure that financial statements are in accordance to General Accepted Accounting Principles (GAAP). As we all know, investors, creditors, managers, and government agencies use these statements. Additionally, our team checks and evaluate the operational performance by learning particular areas of the organization, its significance and effectiveness. Anderson, Olds, & Watershed will provide sensible, but not complete, assurance services that are being carry out by professional auditors to enhance the reliability of internal controls, IT systems, financial statements, compliance with regulation, and...
Words: 279 - Pages: 2
...Jamie, 2004). Organisations maintain their financial reports with the help of accounting theories and policies. The international financial reporting standards also help to keep the accounting practice effectively, efficiently, and correctly. The efficient management will be built if the organisation follows the international reporting standards accurately. As a mandatory course unit of myself I need to prove my understanding about the financial systems and auditing through this report. I will gradually demonstrate my understanding on the purpose, use, importance of accounting records, accounting systems, computerised accounting system, manual accounting systems, business risk, audit risk, internal and external control systems, importance of auditing, and planning audit assignment as well as preparing audit report in the body part of my report. Task One Purpose and Use of Different Accounting Records Accounting records represents the management of all source of information in different records books. These records are ledger, journals, bank statements, adjusting journals, statement verification, invoice, brochure, and etc. The purpose and use of different accounting record in the following. Purpose To illustrate the purpose of accounting records we chose main two types of accounting record. These are journal and ledger. The journal represents the original entry. The purpose of journal entry is given below. * Knowing the date of transaction * Determining the accounting...
Words: 2394 - Pages: 10
...Planning Broadly speaking, audit planning is specific guidelines for auditor to perform an audit. Audit planning is usually conducted at the beginning stage of audit process. AICPA (American Institute of Certificate Public Accounting), PCAOB (Public Company Oversight Board), and IFAC (The International Federation of Accountants) are organizations or non-profit corporations who contributes to developing standards and guidance in auditing area, including standards for audit planning. Thus, this essay will discuss the requirement, and compare and contrast, of standards and guidance for auditing planning that has been issued by them; as well, analyze the impact on the performance of the audit. AICPA, by its publication titled AUC Section 300, addresses guidance for auditors in planning an audit. This contains introduction, objective, requirements, and application and other explanatory material. First, the introduction part includes the scope in planning the audit, the role and timing of planning, and the effective date of this standard. The scope of planning an audit explains the responsibility of the auditor to plan an audit of financial statement. This section also mentioned to refer to section 600, Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors) for further information related to the auditor’s responsibility. The role of planning and timing explains the adequate benefit in planning the audit of financial statements; such...
Words: 2209 - Pages: 9
...“Ethics Audit Benefits.” Please respond to the following: Compare (1) the benefits associated with conducting an ethics audit against (2) the challenges of measuring nonfinancial performance and the risks inherent in ethics auditing. Ethics audit is a systematic evaluation of an organization’s ethics program to determine if it is effective or not. Effectiveness of programs and polices can be improved and organization can identify potential risks and liabilities and can improve its compliance with the law (Ferrell, Fraedrich & Ferrell, 2011, pg.243-245). The ethics audit, like the financial audit, should be conducted regularly rather than in response to problems involving or questions about a firm’s priorities and conduct. The process of auditing and reporting a firm’s ethics programs is no guarantee that it will avoid challenges related its efforts. In addition, because this type of auditing is relatively new, there are few common standards to judge disclosure and effectiveness or to make comparisons. The auditing process can also demonstrate the positive impact of ethical conduct and social responsibility initiatives on the firm’s bottom line, convincing managers and other primary stakeholders of the value of adopting more ethical and socially responsible business practices. Determine if it would ever be better not to conduct an ethics audit. Explain your rationale. Ethics audits help know the ethical goals and standards that need to be achieved. These...
Words: 586 - Pages: 3
...HULT International Business School EMBA Carlo Giorgis HULT International Business School Executive MBA CHANGE MANAGEMENT The reorganization of the Group Internal Audit Department FINAL assignment: Carlo Giorgis Change Management 1 HULT International Business School EMBA Carlo Giorgis EXECUTIVE SUMMARY UniCredit is one of the largest European financial groups, operating in 22 European countries with around 160.000 employees worldwide and 9.500 branches. In 2005, following the merger with HVB and the appointment of a new Head of Department, the Internal Audit Department (IAD) was reorganized. The expected results were obtained later than planned, with large resistances, process and relationships disruptions and bureaucracy increase. Main reasons were due to a simplistic approach to change, an inadequate leadership style, lack of compelling vision and insufficient communication. The IAD restructure could have been managed more effectively with a different approach in terms of: Organization metaphor: IAD has aspects of both Machine and Organism (Morgan, 1986); Model of change: William Bridges’s Model (Managing the transition, 1991) and Kotter Eight Steps (1995); People’s management, keeping into account the Behavioral (Pavlov, 1928 – Skinner, 1953) and Psychodynamic (Kubler-Ross, 1969 – Satir et al, 1991) approaches; Team’s management, building a project team taking into account the personal traits of team members (Belbin, 1981), involving external...
Words: 3072 - Pages: 13
...explanation on how I intend to carry out the audit process plan on Apollo Shoes Company internal audit services. The audit process will involve a series of steps. After receiving Apollo Shoes Company’s preliminary list such as the financial statement and organizational charts, I will plan the review while primarily conducting a risk workshop which will assist me in the process of identifying the key risks and raising awareness on the risks. Later I will draft the audit plan and schedule an open meeting with Apollo Inc. Company. In the open meeting, the senior management and the administrative staff who are to be involved in the process of Auditing must be present. During this meeting I will conduct a discussion on the audit scope where I will expect the available individuals to ask me any questions regarding the review areas they are concerned about. The audit timeframe will be determined and potential timing issues discussed such as deadlines that could impact the audit. After the open meeting, I will finalize the audit plan before beginning the field work. During fieldwork I will talk with the staff members, conduct a procedural manual review, and learn about the processes of the business, test for compliance with any applicable policies, procedures, laws and regulations and finally access how adequate the internal controls are. At this point I will make the staff know that I will schedule meetings with them during the process of auditing. In addition, I will also let the...
Words: 454 - Pages: 2
...113. Effective for audits of financial statements for periods beginning on or after December 15, 2001, unless otherwise indicated. .01 An independent auditor plans, conducts, and reports the results of an audit in accordance with generally accepted auditing standards. Auditing standards provide a measure of audit quality and the objectives to be achieved in an audit. Auditing procedures differ from auditing standards. Auditing procedures are acts that the auditor performs during the course of an audit to comply with auditing standards. Auditing Standards .02 The general, field work, and reporting standards (the 10 standards) approved and adopted by the membership of the AICPA, as amended by the AICPA Auditing Standards Board (ASB), are as follows: General Standards 1. The auditor must have adequate technical training and proficiency to perform the audit. 2. 3. The auditor must maintain independence in mental attitude in all matters relating to the audit. The auditor must exercise due professional care in the performance of the audit and the preparation of the report. Standards of Field Work 1. The auditor must adequately plan the work and must properly supervise any assistants. 2. The auditor must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures. The auditor...
Words: 1607 - Pages: 7
...Public Schools CHAPTER 16 TABLE OF CONTENTS Chapter 16 ____________________________________________________16.1 Audit Responsibilities __________________________________________16.1 Types of Audits______________________________________________________ __ 16.2 Financial Audits ___________________________________________________ 16.2 Single Audits _____________________________________________________ 16.2 Program-Specific Audits_____________________________________________ 16.2 Performance Audits ________________________________________________ 16.2 Auditor General Audits______________________________________________ 16.3 Management VS Auditor Responsibilities ____________________________________ 16.3 Selecting An Independent Auditor _________________________________________ 16.4 Preparing For Your Annual Audit __________________________________________ 16.5 Documents _______________________________________________________ 16.5 Financial Statements _______________________________________________ 16.6 Other Schedules And Reconciliations __________________________________ 16.6 Other Supporting Documentation _____________________________________ 16.6 Single Audit Requirements _______________________________________________ 16.7 Background ______________________________________________________ 16.7 Commonwealth Implementation ______________________________________ 16.7 Audit Scope ______________________________________________________ 16.8 Risk-Based Approach For Determining Major Programs...
Words: 3653 - Pages: 15
...professionals on the payroll. Firm provides auditing and tax services, also builds information systems for the consulting side of business for non-audit clients, or clients who have not publicly traded. first assignment as an audit mangager is to assist an audit partner on a client acceptance decision. prospective client is OCEAN MANUFACTERING medium sized manufacturer of small home appliances. At a local chamber of commerce meeting, the president met the company’s president. The company decided to end its relationship with its current auditor because they want to build a relationship with a more nationally established CPA firm because the company want to make an initial public offering IPO of its common stock within the next few years. Ocean’s annual financial statements have been audited each of the past 12 years to comply with the debt covenants and to receive interest rate on the company’s existing line of credit. The December 31 fiscal year has passed so NOW it is the time for the company to contract with a new auditor to get the audit under way. Our partner Jane Hunter is intrigued with the idea of having a client in the home appliance industry. Especially oceans, because it has a favourable market position and growth potential!! Our company never had a client in this industry (small home appliances) before. Most of our audit clients are in the healthcare services industry. For us it is an excellent opportunity to enter a new market!! but, our partner wants...
Words: 1782 - Pages: 8
...Leung Tony Saludas Wendy Sanchez Jim Stickell MGT 330 Jack Land “The management function of monitoring performance and making needed changes” is control (Bateman). Control is the fourth and final function that completes the management process and will help guarantee success in an organization. This process will help management ensure that an organization’s will use all necessary resources to achieve their goals effectively and efficiently. The Walt Disney Company and their associated offices have continuously over the years committed to produce creative entertainment experiences made for every family across the world. Today, this major corporation is split into four different business segments in the following categories: media networks, parks and resorts, studio entertainment, and consumer products. (The Walt Disney Company) Since founded in 1923, The Walt Disney Company use control mechanism to maintain regulated guidelines and procedures to achieve their goals effectively and efficiently. This paper will examine, and compare and contrast four types of control mechanisms the Walt Disney Company used: (1) budgetary controls, (2) marketing control, (3) bureaucratic control cycle, and (4) management audits to determine the effectiveness of each by examining the positive and negative reactions to these controls in order to explain how these control mechanisms affect the four function of management. Budgetary control is one of the most recognized internationally...
Words: 1467 - Pages: 6
...purpose of the significant unusual transaction (2) Obtain understanding of a company’s financial relationship with its executive officers and also understanding their employment contracts. The PCAOB developed this standard and amendment to focus on the auditor’s areas that have been associated with risks and fraudulent financial reporting errors, the PCAOB hopes the new standard will increase the auditors like hood to identify material misstatement on financial statements. Auditing Standard (AS) No.18, Related Parties, will supersede an interim auditing standard and is effective for fiscal year beginning on or after December 15, 2014. The PCAOB noticed the existing standard provided example of procedures an auditor could perform but did not require specific procedure therefor; the PCAOB provided the following procedures to follow. • Evaluate and understand a company’s process in identifying, authorizing, and approving accounts for and disclose related party transaction relationship and transactions. • Perform specific inquiries in upper management regarding company’s related parties. • Communicate any relevant...
Words: 564 - Pages: 3
...Polsinelli Update August 2014 RAC Program to Resume Limited Reviews this Month On August 4, 2014, the Centers for Medicare and Medicaid Services (CMS) announced that it would allow the Recovery Audit Contractor Program (RAC) to resume a limited number of reviews this month. The purpose of the RAC is to correct improper payments in Medicare claims for services provided to Medicare beneficiaries to ensure that proper payments are made on behalf of patients and taxpayers. The program has been dormant since the current Recovery Auditor contracts expired June 1, and CMS stated that the program has experienced continued delay in beginning modifications to the current contracts. CMS noted that there will be no impatient status reviews during...
Words: 727 - Pages: 3
...CHAPTER 6 Audit Planning, Understanding the Client, Assessing Risks and Responding Brief Topical Outline A. The audit process 1. Obtaining clients (PowerPoint 6-2) — Submit a proposal — communicate with predecessor auditors 2. Overall process (PowerPoint 6-3,4) B. Audit planning (PowerPoint 6-5) 1. Establish an understanding with client, ordinarily through use of an engagement letter (PowerPoints 6-6, and 6-7) 2. Overall on audit planning (PowerPoint 6-8) C. Obtain an understanding of the client and its environment 1. Risk assessment procedures (PowerPoint 6-9) 2. Business risk approach to the audit (PowerPoint 6-10 through 6-16) 3. Materiality D. Assess the risks of material misstatement and design further audit procedures 1. Overall approach (PowerPoint 6-17) 2. Assessing fraud risks (PowerPoints 6-18 through 6-21) 3 Design further audit procedures (PowerPoints 6-22 and 6-23) E. Organization of the audit program 1. The systems portion 2. The substantive test portion (PowerPoint 6-24) 3. Analyzing transactions affecting accounts (PowerPoint 6-25) 4. Indirect verification of income statement accounts (PowerPoint 6-26) 5. Assertions, objectives and procedures (PowerPoint 6-27) — Management assertions — Direction of audit testing (PowerPoint 6-28) — Substantive objectives for the audit of asset accounts ...
Words: 948 - Pages: 4
... | | |Auditing | Copyright © 2009, 2008, 2007 by University of Phoenix. All rights reserved. Course Description In this course, students focus on the auditing practice performed by public accountants. Topics include the CPA profession and the auditor’s role, planning the audit, audit reporting and required communications, evaluating internal controls, audit programs for current assets and liabilities, and audit programs for other business cycles. Policies Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student website to view this document. • Instructor policies: This document is posted in the Course Materials forum. University policies are subject to change. Be sure to read the policies at the beginning of each class. Policies may be slightly different depending on the modality in which you attend class. If you have recently changed modalities, read the policies governing your current class modality. Course Materials Arens, A. A., Elder, R. J., & Beasley, M. S. (2006). Auditing and assurance services: An integrated approach (11th ed.). New York, NY: Pearson. Hayes, R., Dassen, R., Schilder, A., & Wallage,...
Words: 2385 - Pages: 10
...Audit Process Letter Laura Sferra ACC/546 November 23, 2015 Allen Foster Mrs. Susan Right Senior Partner Anderson, Olds, and Watershed 1 Shoe Street New York, NY. 90001 Dear Mrs. Right, Mr. Lancaster, President of Apollo Shoes, has expressed his satisfaction with the services that our firm offers and would like to continue with a full audit. Because our client does not want our firm to talk to the predecessor auditor, I recommend accepting a prospective engagement after I perform an investigation by gathering information about our client's reputation and background. Client acceptance and continuance procedures are the foundation of the risk assessment process (SAS No. 8). Upon acceptance of our client, I am confident that we will be able to move forward under the AICPA auditing standards to determine that the financial reporting framework is appropriate. My objective is to plan the audit so that it is conducted efficiently and effectively, in accordance with Generally Accepted Auditing Standards. I will take into consideration the preliminary planning activities such as the client acceptance, ethical position of our audit firm and our understanding of the entity and its environment, including its internal control, to develop an effective and efficient overall audit strategy that will appropriately respond to assessed risks. Our engagement letter, will include the timetable of fieldwork, the scope and duration of...
Words: 1378 - Pages: 6
