Beginning the Audit Report

Senior Partner From Kim Cummings Re Apollo position inspect close Senior Partner As you realise, our secure has been rented to perform the Apollo Shoes clear stock. The preparation dish up has been the most delicate stage as we want to ensure we break a solid size up approach. The team up I select give be dedicated in meeting the objectives and strategies for completing the audit. I leave alone briefly explain to you how I plan to begin the audit process.Now that Apollo Shoes has selected our firm, the initial planning process has begun. Our team must take on every effort to understand Apollo Shoes business and industry. We entrust value the invitee business put on the line before performing either preliminary uninflected actions. Our audit team will ladder hard to understand what caseful of documentation is required, nail documents from previous audits and gather wholly(prenominal) preliminary statements from all take ind fictitious characteries. Our tea m will start with a fall over of the lodges policies and procedures to set in motion our objectives.Our audit team will set corporeality and come off grateful audit risk and acquired risk. It is our responsibility to understand the internal control and assess the type of sis each control holds. By doing this, we must understand each and every process of Apollo Shoes. This whitethorn let in reviewing any athletic field workflow and identifying key controls in those area processes. Our audit team will sit down with department heads to gather a detailed ground of each process so nothing is misinterpreted in our review.Once we turn in a clear understanding of the internal controls and afford assessed their risk, we will begin to collect information to assess fraud risks. The last part of our plan and shape phase of the audit process will be to develop an overall audit strategy and audit program. With this step, we will sterilise the guidelines of our audit review and the be st technology to design for this client. The scope of our audit will be planned during this phase as well as setting our objectives. I start out devoted some key documents related to the Apollo Shoes audit.These documents see how the audit objectives, responsibilities, and strategies for completing the audit will be accomplished. I have also included an explanation of how analytical procedures will be employ to plan, conduct and double-dyed(a) the audit. An explanation of how our team will consider materiality and risk in designing the audit s also attached along with the technology we plan to expend in the audit. I have attached an contest checklist and a rough draft of the client engagement letter for your review. The outline of timeshares and milestones for the Apollo Shoes audit has also been included for your review.Should you have any questions regarding the beginning stages of our audit process or any changes or comments related to the engagement checklist, engagement letter and timeshares, satisfy let me know so we can discuss further. Sincerely, Kim Cummings analyze Objectives, Responsibilities, and Strategies for canvass expiration The primary objective of an audit is to review a companys procedures, the original selective information to determine procedure compliance, and form an audit opinion on the selective information presented and level of compliance.The four principal(prenominal) objectives are to outline and test controls underpin proper procedure was followed establish the risk of audit misapprehension and issue an audit opinion. A control objective is established to ensure procedure is in place to prevent staff from not following constitution. It is principal(prenominal) to verify a procedure has been followed. To do this, an auditor will take a random collection of the documents from the entropy set. The auditor can physical exercise statistics to establish how many documents need to be tested and the risk of an error i n the data set.A specialized computer program is apply by the auditors to select a document and compare the document against company policy to ensure compliance. The level of compliance is assessed against the data size group and form of compliance failure. The risk of audit error is the probability an auditor has reached an away conclusion, which is why the auditor must review all workflow, policies and procedures prior to conscription any conclusion from the samples they have pulled. A Ritter auditors opinion is a identify published by the auditor to ascertain company procedures apply, the audit scope, and the results from testing.Many enkindle parties, such as business owners and investors, review this report. The auditors are responsible in alineing errors, cut costs, and improve the overall general delineateing use by a company. The auditor is to verify company records against the information the company has provided. It is important for auditors to plan and execute t he audit to achieve reasonable assurance. The main strategy of completing the audit is to obtain an understanding of the linnets pecuniary statements, operate processes, and governance policies.The auditor must adopt a blueprint to determine the external factors that could adversely affect the companys operations. The auditor needs to evaluate regulatory practice and ongoing litigation events. With these strategies in place, the audit should be slow streamlined to stay on track and completed in the designated timeshare. analytic Procedures Used to Plan, Conduct and Complete the Audit Analytical procedures are use to identify items associated with uncommon transactions and events, amounts and developments that may point towards items hat have pecuniary statement and audit planning complications. The analytical procedures used in planning the audit largely use data aggregated at a high level (www. Baobabs. Org). Procedures may consist of reviewing changes in account eternal re sts from the prior year to the current year using an unadjusted on the job(p) trial balance or general ledger balance. Procedures may involve an extensive analysis off companys quarterly financial statements. The analytical process used in the overall preview phase of the audit will assist the auditor in assessing conclusions reached and in the evaluation of the overall uncial statement presentation (www. Scabrous. Org). A wide variety of analytical procedures may be used for this purpose. The procedures our team will use consist of see financial statement and notes, consider adequacy of the evidence gathered, and consider unusual or unexpected balances. Materiality and Risk in Audit jut out Materiality is essential when considering the appropriate type of report for a condition set of circumstances. Audit risk is the risk the auditor may unintentionally fail to appropriately modify his or her opinion on financial statements that are materially misstated (wry. WAC. Org). Mater iality is considered by auditors when planning and evaluating the results of an audit. Audit risk and materiality affect the applications of generally accepted auditing standards, particularly the measures of field work and reporting. Audit risk and materiality need to be considered together in designing the nature, timing, and extent of audit procedures and in evaluating the results of those procedures (mm. . PWS. Org). Technology Incorporated Into Audit There are numerous data analysis tools to use for an audit such as Microsoft Excel, Audit Command Language (CAL), and crowned head.Microsoft Excel is an maculation application that is easy to use. It comes with a data-analysis toolkit and built-in functions with a capacity of 65,536 rows by 256 columns and 255 chars per field. CAL has an unlimited capacity. It requires basic training and is menu based. CAL has analytic capabilities and a complete set of preprogrammed analysis. Monarch is a 1,000,000 input page capacity. Training is required, and Monarch provides basic analytic capabilities. Data analysis software is useful in distinguishing fraud of assets and fraudulent reporting.It permits an infinite number of analytical interactions to e metric within sizeable databases. The use of data analysis software will test objectives, ascertain data, request test data, enhance the test data if results are poor and request full data if results are good. The use of filters, sorting statistics, gaps, classification, and samples are Just a few tools to be used in the audit process. The data analysis methodology we will use will be to define, validate, execute, and retain data.Engagement Checklist Learn about the Control milieu Operating Processes Corporate Procedures Regulatory Compliance Test Internal Controls expound Steps in Task Performance Sampling of Company Documents crop Controls and Risk High and medium may cost the business a substantial loss in operating activities Low corrective measures provided b y Department Heads and Managers Issue the Final Report Senior Auditor reviews solutions provided by senior leaders for high and medium risks. Note risk moderateness progress in the risk and control assessment reports prepared by department heads.Rough Draft of Audit Engagement Letter Anderson, Olds, and Watershed 1234 Audit Trail way panama City, FL 32405 January 18, 2015 Larry Lancaster President and CEO Apollo Shoes, Inc. Showdown, ME 12345 Re Audit Engagement Dear Mr.. Lancaster, This letter confirms our prior discussion regarding the chordment for our firm to audit the financial statements of Apollo Shoes, Inc. Our firm will audit Apollo Shoes balance sheet as of 12/31/07, as well as related Statement of Income, Retained Earnings and Cash Flow Statements for all of 2007.We will provide our professional opinion based on this audit. The financial statements will be the responsibility of the Apollo Shoes focusing team. The opinion on the financial statements based on our audit i s the responsibility of the audit team. Our team will conduct the audit process in accordance with generally accepted auditing standards. These standards require our team to conduct the audit in rescript to obtain reasonable assurance if the financial statements are free of dishonorable and misleading statements (wry. NCSC. Deed). This type of audit will measure the accounting principles used by your company along with any assessments made by your management team. Our firms audit will deliver the basis of our opinion. The practices we will use include tests of put down data provided to support all of your company transactions documented n your company accounts. We will also test documents related to your receivables and liabilities finished randomly selected customer accounts and creditors. The audit we will perform cannot be relied upon to see irregularities or all fraud.We will notify you of any material errors we find as well as any illegal acts that grab our forethought th roughout the audit process. If the financial statements are going to be published or reproduced with reference made to the audit our firm conducted, you must agree to give us the statement proofs for our approval prior to publication. As part of the audit engagement for the year ending in 2007, a review of your companys state and federal tax returns will be conducted for Apollo Shoes.The fees our firm charges Apollo Shoes will be billed as the work is performed and based on the time it is needed to fulfill each deliverable plus any acquired out of pocket expenses. The invoices will be due upon receipt. After your review, please sign the enclosed copy and return it to our firm promptly. Our firm appreciates the prospect to perform the Apollo Shoes audit and looks forwarding to working with you. Sincerely, Timeshares and Milestones References Arena, Alvin Elder, Randal and Basely, Mark(2014).