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Audit report III part: Apollo Shoes - Essay Example
Author : augusta82
Finance & Accounting
Pages 4 (1004 words)
Audit report III part Apollo Shoes ACC/546- Auditing 02/28/12 Before we make our opinion, as to whether they reflect a true and fair view of the Apollo Shoes’ financial position the audit team has to examine independently all financial statements and records or books of accounts with the main objective of expressing an opinion…
The audit program will stipulate the fieldwork required to achieve objectives of the audit process. After preliminary review of the items in financial records, the procedures will be carried out in the audit program to test internal controls and the accuracy of transactions. Sampling of transactions is used during the testing. This is because of the time and resource constraints due to the numerous transactions involved. Audit process affects the financial position of the firm to the extent that the management needs to restate or manipulate the financial statements of Apollo Shoes in a manner that will not compromise the materiality of the items in the financial statements (Choi & Jeter, 1992). An item is considered material if its inclusion or omission in the financial statement is likely to cause a change of opinion by the auditor or a change in the financial position from a profit to a loss or from loss to profit. Materiality plays a crucial role in financial reporting. Financial reporting may be abused and often stem from misuse or misunderstanding of the proper application of the materiality concept. Any misstatements whether material or not are not acceptable. ...