Premium Essay

Smackey

In: Business and Management

Submitted By Faloyon
Words 295
Pages 2
Introduction
Smackey Dog Foods, Inc. is a private own dog food manufacturer. The company was started by three sisters in the suburbs of Chicago. Smackey’s clientele are veterinarians, local pet stores and groceries stores. Smackey is in the process of expansion, and the purchase of new equipment produced the demand for an independent audit. The company has two divisions, one produces regular, and the other, gourmet dog food. Keller CPA’s task is to analyze Smackey’s business environment, perform an audit and issue an opinion on Smackey’s financial statements to be used to secure a loan at the local bank for the purchase of additional manufacturer equipment.
Analysis
At the Keller CPA Firm we follow all SEC, and other agencies, rules and regulations. According to Arens, Elder and Beasley (2010), the SEC has influence on setting GAAP and other disclosures, it has authority to develop requirements to guide auditors and CPAs to better design and prepare audits, and financial statements. Not all SEC rules will be applied to Smackey Dog Foods, Inc.’s audit, because this company is not public held, but the auditors will follow SEC’s rules in regard to private companies and determine if the financial statements are fairly presented. (Arens, Elder & Beasley, 2010, p.31).
Auditors accumulate evidence in order to reach a conclusion about the financial statements. To issue an opinion the auditor must determine if the financial statements are fairly presented or not, or is unable to even issue an opinion because of insufficient evidence (Arens et al., 2010, p. 142). The planning of an audit requires the auditor to consider two important approaches: The auditor must accumulate appropriate and enough evidence in order to be satisfied and issue an opinion about the financial statements, and the auditor team

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