Auditing Process and Procedures for Smackey's Dog Food Inc. - Term Paper Example

Only on StudentShare

Extract of sample
Auditing Process and Procedures for Smackey's Dog Food Inc.

SEC influence over the Smackey Dogs food Inc. relate to issues of independence roles for the audit team. The audit standards is one of the influences to be observed, that have to be followed in establishing the independence of auditing team involved in the audit of Smackey. The relationship between the owner’s (Kim) husband and the audit manager Pete is going to influence the disclosure and materiality of the audit contents. The fact that there is a relationship between the bank the loan is being sort and Alan, Kim’s Husband depicts a loan relationship. SEC requires ethical principles to be observed by auditors. Independence is one of the six ethical principles of the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct. The other principles are responsibilities, the public interest, integrity, objectivity and independence, due care, and scope and nature of services. Section 303 of the SEC prohibits officers or directors of a company from manipulating, misleading, coercing or acting fraudulently towards the audit team in a manner to influence the auditor to issues financial information, knowingly or not, that the act could lead to rendering the audit immaterial. In this case, Alan obtains information from the audit manager during beers that will be shared with Kim, the owner and further Sarah who is seeking the loan. This is an issue that ought to be addressed as the result will be an adverse opinion. The underlying issues of Ben’s relationship with the bookkeeper Anita could be controversial in the resulting audit opinion. ...
Download paper

Summary

SEC influence over the Smackey Dogs food Inc. relate to issues of independence roles for the audit team. The audit standards is one of the influences to be observed, that have to be followed in establishing the independence of auditing team involved in the audit of Smackey. …
Author : carlee86

Related Essays

Auditing process
This type of risk is known as engagement risk. The probabilities of different loss or damages that can be caused due to this type of risk can be a financial loss, loss of reputation, and ultimately leading to the downfall of the audit farm. Engagement risks can further be subdivided into three types of risks, namely 1) Client’s business risks, 2) Auditor’s business risk and 3) Audit risk. In the cited case of Aerospace Lighting Inc. (ALI) there are several audit issues related to engagement risks. All those audit issues involved with ALI and its impact on the financial statements and the…
8 pages (2008 words) Case Study
Auditing Introduction Letter to Aplollo Shoes, Inc
Larry Lancaster, Chairman, President and CEO Appolo Shoes, Inc 100 Shoe Plaza, Shoetown, ME 00001 RE: AUDITING AND ASSURANCE SERVICES This letter is to confirm the arrangements and understanding of the upcoming audit of your company. I will to take this opportunity to explain few points about audit and assurance services offered by the firm. The firm is proud to have been in operation for more than 15 years by providing excellent services to clients. We have qualified personnel in all departments who provide a number of services such as auditing and assurance, risk management and internal…
3 pages (753 words) Essay
Auditing
A report by an auditor is a complete review by a third party of the financial position and bookkeeping practices of a company as well as financial statements’ preparation. These financial statements include the statement of cash flows, the income statement and the statement of financial position of a company. In dissimilar contexts, other forms of reports may consist of a concise address to users known as the management letter (Ruppel 145). Every year, all public companies are obliged to publish and file some financial statements, a management letter inclusive, in order to meet regulatory…
3 pages (753 words) Essay
auditing
Overstating of revenues and the understating of expenses Revenues can be overstated so as to show that the company is doing well and that would attract new shareholders. The shareholders would be attracted by the increased revenues and that would imply that they would also get more dividends from the company because of the god performance of the company. The understating of expenses will mean that the profits of the company will increase and that will be appealing to the shareholders of the company (Kara and David, 178). The above facts will make the area of revenues and expenses more risky…
7 pages (1757 words) Case Study
AUDITING
The paper will also indicate any recommendation on furthering the audit in case of an audit problem. Finally the paper will outline the actions following the further work done on the audit. Analysis of the Four Items Debtors During interim audit preparation, a list of who owes the company and the total amount they owe is drafted. According to the trial balance dated 31st March 2011, the amount expected from the debtors amounts to 950,000 pounds. During auditing, the expectation is that the schedule of debtors or the accounts receivables should always agree with the figures in the financial…
8 pages (2008 words) Essay
auditing
A high net profit margin indicates that a company converts its sales into profits fast. The net profit margin also considers costs associated with the sale of products. There are several factors which triggered a decrease in the net profit margins. They include: a. Inventories Even though, a company treats inventories as an asset in the balance sheet, the cost of sales are not reported until a sale is actually made. Therefore, it is possible to calculate the cost of sales in inventories. However, market fluctuations can reduce the value of inventories which in turn lead to devaluation of net…
4 pages (1004 words) Essay
auditing
The auditor is responsible for collecting and evaluating the evidence in order to make an opinion on the financial position of a company. In the contemporary business world, various changes have been experienced as auditors embark on addressing the challenges that face them as professionals. Quality auditing by independent auditors is a vital aspect in that it ensures that capital markets are effectively working while at the same time public and investor’s interests are protected. This paper seeks to examine the changes in the auditing environment and the resulting challenges. Additionally,…
6 pages (1506 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!