As part of our audit process, we will request from Tesla Motors, written confirmation concerning representations made to us in connection with the audit.
We will issue a written report upon completion of our audit of Tesla Motor’s financial statements. Our report will be addressed to the board of directors of Tesla Motor’s. We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion or withdraw from the engagement.
Please sign and return the attached copy of this letter to indicate your acknowledgement of, and agreement with, the arrangements for our audit of the financial statements including our respective responsibilities.
It is very important to document the understanding of internal control through accounting and use of control system flowcharts. It is also important to assess preliminary control risk and perform tests of controls audit procedures. The major goal here is to be effective, but to also be efficient which can be implemented through observation and inquiry. Focus on accounts that are significant to the company’s financial statements like sales or cost of goods sold.
The Sarbanes-Oxley Act requires auditors to provide a estimation on the efficiency & effectiveness of internal controls. Auditors must evaluate the risk of material misstatement for each assertion. Per Section 404 of the Sarbanes-Oxley Act, management and auditors both hold certain obligations on reporting the internal control of the company. Tesla may have internal controls in place to reduce the risk of material misstatement in their financial documents. But, the power & efficiency of these controls must be...
In 1992, the AICPA recommended the use of an engagement risk approach in client acceptance/retention decisions. Consider the first standard of fieldwork (adequate planning & proper supervision). The amount of audit planning is a direct function of the size and complexity of the client. It is also an inverse function of the auditor’s knowledge of an experience with the client.
The decisions that are made by consultations usually involve senior top management. The decisions that are made by consensus usually include the leadership team. The objective of the examination of financial statements by the independent auditor is the expression of an opinion on the fairness with which they present, results of operations and cash flows in conformity with GAAP. The auditor’s report is the medium through which they express their opinion or if circumstances require, disclaim an...
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