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Audit Process Letter Essay

1697 words - 7 pages

Audit Process Letter
Elizabeth Grieco
ACC/546
February 18, 2013
Hillary D. Edmondson

Audit Process Letter
TO: Apollo Shoes, Inc.
FROM: Elizabeth Grieco, Auditor-In-Charge
Anderson, Olds, and Watershed (AOW)
DATE: February 18, 2013
SUBJECT: Beginning the Audit Process

SUMMARY:
This memo includes information regarding how I will begin the audit of Apollo Shoes, Inc. Attached to this memo is the engagement planning checklist, the engagement letter itself, and an outline of timeframes and milestones for the audit. Thank you for choosing Anderson, Olds, and Watershed to complete your audit.
PLANNING THE AUDIT:
Adequate audit planning is the first generally accepted ...view middle of the document...

I have attached our engagement letter at the end of this memo.
I have also developed my preliminary strategy for completing the audit. The information that Apollo Shoes, Inc. has already provided to AOW has been integral in my strategy development. I have begun to consider different areas where misstatements may be of greater risk, along with other factors, such as the past effectiveness of your controls. Staff has also been selected to assist with the audit (Arens, Elder, & Beasley, 2012).
UNDERSTAND THE CLIENT’S BUSINESS & INDUSTRY:
GAAS requires audit teams to obtain a thorough understanding of the client’s business in order to successfully plan and perform the audit work. Thank you for providing the business information to me. This has enabled me to gain an understanding of the business risk applicable to Apollo Shoes, Inc. I will be conducting some interviews and observations with Apollo staff to more fully grasp any industry changes that may have occurred recently (Louwers, Ramsay,

TO: Apollo Shoes, Inc.
Sinason, & Strawser, 2007). Thank you also for making Karina Ramirez so accessible to me and my team. I look forward to working with her on this engagement (Louwers & Reynolds, 2002).
PERFORM PRELIMINARY ANALYTICAL PROCEDURES:
Based on the information Apollo Shoes, Inc. has already provided to AOW, I have been able to perform some preliminary analytical procedures to better understand your business and assess risk. I have done research and obtained information on industry benchmarks from other shoe organizations, such as Nike, so I could make some ration comparisons. These analytical procedures have helped me to determine the timing of the audit procedures, which are laid out in the outline attached at the end of this memo (Arens, Elder, & Beasley, 2012).
CONCLUSION:
The above information is provided to Apollo Shoes, Inc. to ensure an understanding of the preliminary steps I will be performing in planning the audit. Attached at the end of this memo is the engagement planning checklist, the engagement letter, and an outline of timeframes and milestones for the audit. If you are in agreement with the letter, please sign a copy and return to AOW in the self-addressed stamped envelope. Should you have any additional questions or comments, please let me know. Again, thank you for choosing AOW to complete your audit this year.

Engagement Planning Checklist | Workpaper Reference | Initials | Date |
Review Engagement Objective | | | |
Preliminary Planning Team Meetings: | | | |
* Manager | | | |
* In-Charge | | | |
* Staff | | | |
Identify and Review: | | | |
* Relevant information | | | |
* Administrative Procedures | | | |
* Standard Operating Procedures | | | |
* Organizational Charts | | | |
* Financial Data and Analysis | | | |
* Regulatory Information | | | |
* Industry Standards/Best Practices | ...

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