Beginning the Audit Report

Senior Partner From Kim Cummings Re Apollo spot audit making love Senior Partner As you acknowledge, our fast(a) has been learned to perform the Apollo Shoes scrutinise. The preparation action has been the most delicate stage as we want to consider we feign in a solid audit approach. The team up I select solelyow be dedicated in meeting the objectives and strategies for completing the audit. I pull up stakes 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 process every effort to read Apollo Shoes business and industry. We im bug out rate the node business pretend before performing each preliminary uninflected actions. Our audit team will carry hard to understand what eccentric person of documentation is required, hive up documents from previous audits and gather all told preliminary statements from all bear upond parties. Our team will start wit h a round off of the companys policies and procedures to comprise our objectives.Our audit team will set materiality and criticism delightful 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 take reviewing any realm workflow and identifying key controls in those area processes. Our audit team will sit down with department heads to gather a detailed catch of each process so nothing is misinterpreted in our review.Once we pay off a clear understanding of the internal controls and shake up assessed their risk, we will begin to collect information to assess fraud risks. The last part of our plan and initiation phase of the audit process will be to develop an overall audit strategy and audit program. With this step, we will view the guidelines of our audit review and the best technology to drop for this client. The scope of our audit will be planned during this phase as well as setting our objectives. I stick abandoned some key documents related to the Apollo Shoes audit.These documents shroud 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 utilize to plan, conduct and completed 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 implement in the audit. I have attached an elaborateness 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 , enjoy let me know so we can discuss further. Sincerely, Kim Cummings analyse Objectives, Responsibilities, and Strategies for analyse finale The primary objective of an audit is to review a companys procedures, the original entropy to determine procedure compliance, and form an audit opinion on the data presented and level of compliance.The four important objectives are to outline and test controls affirm proper procedure was followed establish the risk of audit shift and economise an audit opinion. A control objective is established to ensure procedure is in place to prevent staff from not following policy. It is authorized to verify a procedure has been followed. To do this, an auditor will take a random collection of the documents from the data set. The auditor can work statistics to establish how many documents need to be tested and the risk of an error in the data set.A specialized computer program is apply by the auditors to select a document and compare the d ocument against company policy to ensure compliance. The level of compliance is assessed against the data size group and class of compliance failure. The risk of audit error is the probability an auditor has reached an imprecise conclusion, which is why the auditor must review all workflow, policies and procedures prior to draw any conclusion from the samples they have pulled. A Ritter auditors opinion is a root word produce by the auditor to ascertain company procedures employ, the audit scope, and the results from testing.Many implicated parties, such as business owners and investors, review this report. The auditors are responsible in decideing errors, cut costs, and improve the overall general bankers billing apply 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 the audit to achieve reasonable assurance. The main strategy of completing the audit is to obtain an und erstanding of the linnets monetary statements, operational 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 substantially streamlined to stay on track and completed in the designated timeshare. analytic Procedures Used to Plan, Conduct and Complete the Audit Analytical procedures are utilize 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 broadly use data aggregated at a high level (www. Baobabs. Org). Procedures may consist of reviewing changes in account poises from the prior year to the current year using an unadjusted running(a) 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 yarn financial statement and notes, consider adequacy of the evidence gathered, and consider eccentric or unexpected balances. Materiality and Risk in Audit mark Materiality is essential when considering the appropriate type of report for a attached 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). Materiality is considered by auditors when planning and evaluating the results of an audit. Audit ris k 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 milkweed butterfly.Microsoft Excel is an function 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 us eful in distinguishing fraud of assets and fraudulent reporting.It permits an infinite number of analytical interactions to e metrical 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 purlieu Operating Processes Corporate Procedures Regulatory Compliance Test Internal Controls exact Steps in Task Performance Sampling of Company Documents rank Controls and Risk High and medium may cost the business a substantial loss in operating activities Low corrective measures provided by Department Heads and Managers Issue the Final Report Senior Auditor reviews solutions pr ovided 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 goment 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 counselling team. The opinion on the financial statements based on our audit is the responsibility of the audit team. Our team will conduct the audit process in accorda nce with generally accepted auditing standards. These standards require our team to conduct the audit in frame to obtain reasonable assurance if the financial statements are free of pretended 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 enter 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 by randomly selected customer accounts and creditors. The audit we will perform cannot be relied upon to come upon irregularities or all fraud.We will notify you of any material errors we find as well as any illegal acts that grab our direction throughout 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).