Beginning the Audit Report

Topics: Audit, Auditing, Internal control Pages: 11 (1923 words) Published: January 24, 2015


Beginning the Audit Report
Kimberly Cummings
ACC/546
January 19, 2015
Jacob Mathews
Beginning the Audit Report

MEMORANDUM
January 19, 2015
To: Senior Partner
From: Kim Cummings
Re: Apollo Shoes Audit
Dear Senior Partner:
As you know, our firm has been selected to perform the Apollo Shoes audit. The planning process has been the most delicate stage as we want to ensure we have a solid audit approach. The team I select will be dedicated in meeting the objectives and strategies for completing the audit. I will 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 make every effort to understand Apollo Shoes’ business and industry. We will assess the client business risk before performing any preliminary analytical procedures. Our audit team will work hard to understand what type of documentation is required, collect documents from previous audits and gather all preliminary statements from all involved parties. Our team will start with a review of the company’s policies and procedures to establish our objectives.

Our audit team will set materiality and review acceptable audit risk and acquired risk. It is our responsibility to understand the internal control and assess the type of risk each control holds. By doing this, we must understand each and every process of Apollo Shoes. This may include reviewing any area workflows and identifying key controls in those area processes. Our audit team will sit down with department heads to gather a detailed understanding of each process so nothing is misinterpreted in our review.

Once we have a clear understanding of the internal controls and have assessed their risk, we will begin to collect information to assess fraud risks. The last part of our plan and design phase of the audit process will be to develop an overall audit strategy and audit program. With this step, we will determine the guidelines of our audit review and the best technology to use for this client. The scope of our audit will be planned during this phase as well as setting our objectives.

I have attached some key documents related to the Apollo Shoes audit. These documents cover 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 used to plan, conduct and complete the audit. An explanation of how our team will consider materiality and risk in designing the audit is also attached along with the technology we plan to use in the audit. I have attached an engagement checklist and a rough draft of the client engagement letter for your review. The outline of timeframes 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 timeframes, please let me know so we can discuss further. Sincerely,

Kim Cummings

Audit Objectives, Responsibilities, and Strategies for Audit Completion
The primary objective of an audit is to review a company’s procedures, the original data to determine procedure compliance, and form an audit opinion on the data presented and level of compliance. The four main objectives are to outline and test controls; validate proper procedure was followed; establish the risk of audit error; and write an audit opinion.

A control objective is established to ensure procedure is in place to prevent staff from not following policy. It is important 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 use statistics to establish how many documents need to be tested and the risk of an error in the data set. A specialized computer program...

References: Arens, Alvin; Elder, Randal; and Beasley, Mark(2014). Auditing and Assurance Services with ACL Software CD (15th ed). Prentice Hall.
Lanza, Richard B (1999). 101 ACL Applications: A Toolkit for Today’s Auditors.
Global Audit Publications.
North Carolina University (2014). Retrieved from http://www.ncsu.edu/unity/AU Section 312.
PricewaterhouseCoopers (2014). Retrieved from www.pwc.org.
Public Company Accounting Oversight Board (2013). AUSection 329A. Retrieved from
http://pcaobus.org/standards/auditing/pages/AU329A.aspx.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Beginning the Audit Report 2 Essay
  • Beginning The Audit Report A Essay
  • Beginning the Audit Report Essay
  • Essay about Audit
  • Beginning The Audit Report Essay
  • Audit Report Essay
  • Audit Essay
  • Beginning the Audit Process Essay

Become a StudyMode Member

Sign Up - It's Free