AUDIT OF SMACKEY DOG FOODS
The Audit of Smackey Dog Food, Inc.
James Fleming
Acct 555
Course Project
AUDIT OF SMACKEY DOG FOODS, INC
The Smackey Dog Food, Inc. is a family owned business. It was started by three sisters, Sarah, Kim and Jillian, in the kitchen of their home. They lived in a suburban area of Chicago, Illinois. Their business is making all natural dog food. After using their own dogs and the neighbor’s dogs as test subjects, it was discovered by local vets, pet stores and grocery stores. These local places began to distribute the dog food. The demand for their food began to increase and they moved their business to a larger facility and hired additional workers. As compared to competitors, Smackey Dog Food, Inc., began to rise significantly. Due to the increase in sales, the sisters decided to expand and add a new division called Best Boy Gourmet. In order to secure an additional loan for their expansion, the bank has requested an audit of the current financial statements. Sarah, the President and General Manager of the company is sure the company will be able to get the loan based on projections from Jillian and her sales team. Keller CPA’s was hired to perform the audit. My team and I will create a plan for the audit and form an opinion about the financial statements which will be reviewed by the bank in order to get the $150,000 loan.
Q1. Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc. The SEC (Securities and Exchange Commission) has influence over this audit because Keller CPA’s have to meet the required standards as set by AICPA Code of Professional Conduct. The auditors have to make sure they can maintain independence, responsibilities, the public interest, integrity and objectivity. Independence and integrity may become a problem due to the relationship between Pete and Alan. If this were to prove a problem, the SOX regulation would come into play.
Q2. Discuss the essential activities involved in the
James Fleming
Acct 555
Course Project
AUDIT OF SMACKEY DOG FOODS, INC
The Smackey Dog Food, Inc. is a family owned business. It was started by three sisters, Sarah, Kim and Jillian, in the kitchen of their home. They lived in a suburban area of Chicago, Illinois. Their business is making all natural dog food. After using their own dogs and the neighbor’s dogs as test subjects, it was discovered by local vets, pet stores and grocery stores. These local places began to distribute the dog food. The demand for their food began to increase and they moved their business to a larger facility and hired additional workers. As compared to competitors, Smackey Dog Food, Inc., began to rise significantly. Due to the increase in sales, the sisters decided to expand and add a new division called Best Boy Gourmet. In order to secure an additional loan for their expansion, the bank has requested an audit of the current financial statements. Sarah, the President and General Manager of the company is sure the company will be able to get the loan based on projections from Jillian and her sales team. Keller CPA’s was hired to perform the audit. My team and I will create a plan for the audit and form an opinion about the financial statements which will be reviewed by the bank in order to get the $150,000 loan.
Q1. Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc. The SEC (Securities and Exchange Commission) has influence over this audit because Keller CPA’s have to meet the required standards as set by AICPA Code of Professional Conduct. The auditors have to make sure they can maintain independence, responsibilities, the public interest, integrity and objectivity. Independence and integrity may become a problem due to the relationship between Pete and Alan. If this were to prove a problem, the SOX regulation would come into play.
Q2. Discuss the essential activities involved in the
Cited: http://clubs.cob.calpoly.edu/~cmiller/446_01/Handouts/05%20overview%20of%20Legal%20liability%20of%20cpa.pdf