Auditing Introduction Letter
To: Apollo Shoes, Inc.
From: Lead Auditor Anderson, Olds, and Watershed (AOW)
Date: March 30, 2015
Subject: Auditing and Other Assurance Services Available
Dear Mr. Unum (Vice President of Finance),
Last week you meet with Arnold Anderson, CPA (partner in charge of the audit), Darlene Wardlaws, CPA (engagement manager) and me Ashely Bishop (lead auditor) you discuss with us Apollo Shoes, Inc. decision in dismissing your current engagement with Smith & Smith auditing firm. At AOW we are glad you decided to bring us abroad. This letter will include information regarding the services that Anderson, Olds, and Watershed is able to provide to our clients ...view middle of the document...
36). In order to make sure you are following these procedures, rules and regulations we will conduct compliance audit. The last audit of the three we perform is financial statement audits. Financial statements audits are conducted to determine whether the financial statements are stated in accordance with Generally Accounting Accepted Principle (GAAP) (Arens, Elder, and Beasley, p.37). In financial audit our auditor will gather information to determine if there are any material errors or other misstatements. At AOW we also offer other assurance service such as audit of historical financial statements, audit of internal control over financial reporting, review of historical financial statements, and attestation on information services. Our auditor will issue written report expressing an opinion on whether the financial statements are in accordance with GAAP in audit of historical financial statements.
Professional Standards for Services Offered
AOW is an independent audit firm since we claim independent we need to follow the standards in accordance with Generally Accepted Auditing Standard (GAAS.) GAAS AU Section 150 paragraph .02 states “general, field work, and reporting standards (10 standards) approved and adopted by the membership of the AICPA, as amended by the AICPA Auditing Standards Board (ASB), are as follows:
1. The auditor must have adequate technical training and proficiency to perform the audit.
2. The auditor must maintain independence in mental attitude in all matters relating to audit.
3. The auditor must exercise due professional care in the performance of the audit and preparation of the report.
Standards of Field Work
1. The auditor must adequately plan the work and must properly supervise any assistants.
2. The auditor must obtain a sufficient understanding of the entity and its environment including its internal control, to assess the risk or material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures.
3. The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the financial...