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Name _JANICE VALDEZ Course Code _AC555ON_Grade ___/ Date 4/15/_2012_

Questions:

Q1: Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc.

Solution:
The Securities and Exchange Commission (SEC), an agency of the federal government, assists in providing investors with reliable information upon which to make investment decisions. The Securities Act of 1933 requires most companies planning to issue new securities to the public to submit a registration statement to the SEC for approval. The Securities Exchange Act of 1934 requires public companies and others to file detailed annual reports with the commission. SEC examines these statements for completeness and adequacy before permitting the company to sell its securities through the securities exchanges. SEC requires that financial statements be accompanied by the opinion of an independent public accountant, which is a part of a registration statement and subsequent reports.
Since Smackey Dog Foods, Inc. is not a public company, there is no direct influence of SEC. However, SEC’s rules establish the guidelines of GAAP and personal conduct for Smackey Dog Foods, Inc.
(Auditing and Assurances Services, 13th Edition. Pearson Learning Solutions p. 30).
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Q2: Discuss the essential activities involved in the initial planning of an audit. How do these all specifically to the Smackey Dog Food client?

Solution:

1. The auditor decides whether to accept a new client or continue serving an existing one. This determination is typically made by an experienced auditor who is in a position to make important decisions. The auditor wants to make this decision early, before incurring any significant costs that cannot be recovered.
2. The auditor identifies why the client wants or needs an audit. This information

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