Smackey Dog Foods, Inc. is a small, private company which specializes in manufacturing and selling natural dog foods. Their new boutique division, Best Boy Gourmet has grown significantly due to recent product demand. The company started small and is operated by sisters Sarah, Kim, and Jillian. Sarah serves as the President and General Manager. Kim is the Production Operation Manager overseeing the inventory, production, and shipment of the dog food with the help of her assistant, Henry. Jillian is in charge of Sales with a team of 12 salesmen in Illinois, Indiana, and Wisconsin. The business is based out of their hometown of Chicago. In an attempt to expand the business, Sarah has applied for a loan of $150,000 with a local bank. Currently, Smackey Dog Food Inc. already has an outstanding loan of $150,000 which is secured by the production equipment that was purchased with the money from the loan. Smackey Dog Food Inc.’s goal is to secure a second loan that would be secured by the company’s corporate accounts receivable. The bank is requiring a set of audited financial statements before issuing the second loan. Therefore, Smackey Dog Food Inc has contacted my firm, Keller CPAs, to perform the audit. My firm had no prior experience with auditing dog food manufacturers, but we decided to venture out and accept the audit at the end of the year. Assigned to the lead the audit are Pete, Ben and Maureen. Pete is a very experienced auditor that I have worked with on several audits. Ben and Maureen were assigned field auditors to assist myself and Pete. Ben has been with my firm for one year with no prior auditing experience to Keller CPAs. Maureen has 5 years prior experience as an auditor before joining our team. We at Keller CPA have researched and benchmarked the industry to qualify a knowledgeable opinion of our new client, Smackey Dog Food Inc.
Smackey Dog Foods, Inc. is a privately owned company and...
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