Auditing Introduction Letter
ACC 546
August 6, 2012
Larry Lancaster
President and Chairman
Apollo Shoes, Inc.
100 Shoe Plaza
Shoetown, ME 00001
Auditing Introduction Letter
Thank you for choosing Anderson, Olds, and Watershed (AOW) to provide audit and other assurance services to Apollo Shoes. This letter will give you a brief overview of the services we provide. Based on comments in the Audit Committee meeting, our main goal is to provide services beneficial to Apollo Shoes with an emphasis on detection of fraud and errors, information systems, and tax returns.
Audit and Assurance Services Offered
AOW provides many audit and assurance services to our clients. The following is a listing of the most common audit and assurance services and the benefits each will provide to Apollo Shoes. There are three types of audits we provide: operational, compliance, and financial statement.
Operational audit - evaluates the efficiency and effectiveness of any part of an organization’s operating procedures and methods. The benefits of the operational audit include recommendations by outside experts for improving operations which will help address one of Apollo’s concerns of detecting procedures that cause errors.
Compliance audit - is conducted to determine whether Apollo Shoes is following specific procedures, rules, or regulations set by some higher authority. This critical to make sure Apollo is compliant with the IRS and the SEC.
Financial statement audit – is conducted to determine whether the financial statements are stated in accordance with specific criteria. This audit makes sure Apollo is following generally accepted accounting principles (GAAP) and the financial statements are fairly stated and are not misstated. (Arens, Elder, & Beasley, 2012, p. 13 -15)
The assurance services most beneficial to Apollo include attestation services looking at the audit of historical financial statements, audit of internal controls over...