Audit Process Letter Essay

1402 words - 6 pages

Audit Process Letter
Laura Sferra
ACC/546
November 23, 2015
Allen Foster

Mrs. Susan Right
Senior Partner
Anderson, Olds, and Watershed
1 Shoe Street
New York, NY. 90001

Dear Mrs. Right,

Mr. Lancaster, President of Apollo Shoes, has expressed his satisfaction with the services that our firm offers and would like to continue with a full audit. Because our client does not want our firm to talk to the predecessor auditor, I recommend accepting a prospective engagement after I perform an investigation by gathering information about our client's reputation and background. Client acceptance and continuance procedures are the ...view middle of the document...

Field work on the audit will not begin until the audit program has been approved by audit management. My goal includes planning, assessing risk, and performing engagement procedures to produce the optimum mix of quality and profitability.
I will perform these tasks using professional skepticism and judgment.
Attached are the supporting documents for the beginning phase of the Apollo Shoes audit. If you have any modifications, inquiries or related information regarding this audit, please let me know.
Sincerely,
Laura Sferra

Document: Beginning Phases of Audit Plan - objectives, responsibilities, and strategies to complete the audit.

Phase One: Client Acceptance
Objectives:
To determine both acceptance of a client and acceptance by a client. Decide on acquiring this new client and the type and amount of staff required.
Responsibilities:
Evaluate the client's background and reasons for the audit.
Determine whether the we are able to meet the ethical requirements regarding our client.
Determine personnel to perform the audit and the need for specialists.
Prepare a client proposal and obtain an engagement letter.
Phase Two: Planning
Objectives:
Determine the amount and type of evidence and review required to give the assurance that there is no material misstatement of the financial statements.
Responsibilities:
Perform audit procedures to understand the entity and its environment, including the entity's internal controls.
Understand internal control and assess the risks of material misstatements of the financial statements.
Determine materiality
Prepare the audit program based on approved objectives and on identified risks.

Audit Strategies

An audit strategy includes compliance with applicable generally accepted auditing standards and, at the same time, maximizes engagement profitability will include the following components:

• Creating and responding to client acceptance and retention evaluations
• Examining the general ledger account activity to provide low-cost substantive evidence and risk-assessment procedures.
• Preparing internal control flowcharts and memos
• Assess acceptable and inherent risk
• Conduct a thorough risk assessment to reduce the assessed level of risk of material misstatement.
• Performing maximum analytical procedures during planning, engagement performance and engagement review to reduce detailed tests of balances.
• Performing only necessary tests of controls and tests of balances procedures.
• Determining tolerable misstatement by financial statement classification to minimize auditing procedures.
• Document fieldwork results and compile evidence to support audit opinion

Analytical procedures to plan, conduct and complete the audit.

To obtain evidence on the effectiveness of internal controls, our audit team will conduct various audit procedures that are carefully selected during audit planning. Our...

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