Beginning The Audit Report Essay Example for Free

Beginning The Audit Report EssayI would like to thank you for vesting your political doweryy and trust in our firm to be your scrutinizeors. In this letter an explanation of the general terms and the passage of our audit exit be defined. This is only an educational purpose letter and is not an agreement.THE AUDIT PROCESSAn audit is an interrogative and review of companies fiscal statements. The examination is performed with a view to portray an opinion of whether the companies financial statements prove a true and fair statues of the company. Auditing the activities of the company get out be planned, executed properly and thoroughly reviewed to assure that all statements are in meekness with laws and regulations. The following is the dish out as to which our firm bequeath be conducting the auditWe have a strict thickeningele screening process, once the screening process ofthe company is concluded and confirms that youre company is an acceptable customer we go out pr oceed with the next step in the process.Once the screening process is passed we might fatality to contact the companies previous auditor and have agreed consent from them to proceed. If the previous auditor does not consent or if your company does not allow us authority to contact he previous audit our firm will not perform the audit in your company.After all consents have been attached there will be an audit engagement letter that will be issued to your company, which would represent the agreement between your company and our firm. The agreement would give the entire basic terms of the way the audit will be performed and what expectations of the firm and company will be.Once your company receives the engagement letter, all data will be collected from your company and the environment. The information collected will allow us to identify problem areas from prior audits.When all data is gathered we will complete a risk assessment of the company so that the best audit greet may be s elected.For low risk companies we may screen controls to analyze whether or not the companies internecine controls are functioning followed by a smaller set of substantive testing.If the company is high risk your internal controls are weak, we would will rely heavily on substantive testing in order to make sure that there is no misstatements in the companies accounts.Whichever approach is chosen the analytical process during different parts of the audit will be the same.Once the main ladder is completed we will review the audited work and bring forth any issues to you that have risen from the audit work.When the issues are resolved (if any), the audit report will be issued. This would conclude our audit process on the companies accounts and statements for the year.Attached you will find other documents which will give you a better understanding of the audit process. Please if you have any questions entertain feel free to write to us.Thank you,The auditors._Attachments_Engagement checklistEngagement letterTimeframes for the auditENGAGEMENT CHECKLISTAUDITYES/NOIntroductory letter sent to clientScreening process of client completeFirst meeting with client completeGeneral issues were discussed with clientConsent to contact previous auditor questDetailed meeting with client discussing engagement terms heldLetter of engagement sent to clientChanges to scope made (if any)Letter received by client and acceptedAudit timetable copy sent to clientENGAGEMENT LETTERToDirectors of Apollo Shoes.This letter serves as representation that we will act as auditors for Apollo Shoes, therefore right of the company and our firm in all respected areas of the audit.MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTSResponsibility of preparation and accurate presentation of the financial statements in pact with IFRS and SFAS will be held by management. The respected responsibility includesAppropriate accounting policies should be selected and appliedInternal controls relevant to the preparing and presenting financial statements should be designed and implemented. financial reports should be free from misstatements.Accounting estimates should be made to a reasonable and circumstantial amount(Apra, 2009).AUDITORS RESPONSIBILITYOur firms responsibility is to give the company an opinion on the financial statements that are presented to us based on our audit findings. We will review all data collected and ascertain that information and work is in compliance with statutes, regulations, GAAP, SFAS, and IFRS. We will also ascertain that the data is in compliance with the code of ethics for professional auditors (Apra, 2009).Audit will include the review and examination of all figures and facts on a test basis. Due to the nature of the test there may still be a risk that some misstatements will go undiscovered. In order to reduce risk we encourage and need Apollo to provide and make necessary arrangements relating to the execution of the audit. Our firm will requir e open-plan access to all records, documentation and all information requested by our firm. Any representation that the company makes in connection to the audit will be expected to be confirmed and in writing.When the firm feels that there is sufficient work reviewed and completed by the auditors to establish an opinion, the firm will issue and audit report. The report will be given to the company if all issues and circumstances brought forth by the auditors is resolved by the company.FEE AND OTHER ISSUESThe firms fee will be charged on a fixed amount of $12,000 plus an additional hourly wage based on the number of hours worked by the firms stave on your companies audit engagement. This additional fee will vary depending on the level of seniority the individual has and time spent. Our firm will issue a management letter, which will focus on the companies weaknesses in the internal control system, which arose from the audit. This letter is a professional courtesy letter and is not a part of the audit.Please sign this letter and send it back to us. Once signed, this letter will represent the confirmation of the terms of engagement. This letter will remain impressive until the letter is superseded, canceled or amended.Sincerely,AuditorsOn behalf of directorsSignature __________________________________TIMEFRAMES FOR THE AUDITAUDITDATE COMPLETEDDATE REVIEWEDGathering of knowledge about clientIndustry stats overlap rangeMarkets operatedKey customersKey suppliersCompetitorsRisk assessmentInitial analytical proceduresKey evaluation of audit approachSelection basis of samples exam receivablesTesting and checking inventoryTesting payablesTesting long-term liabilitiesTesting capital and other shareholders fundsTesting and verifying non-current assetsVerification of cash and bank details terminal analytical reviewReview of post balance sheet eventsApplication of accounting standardsAudit finalizationIssue of audit reportReferencesArens, A.A., Elder, R.J., Beasley, M.S. (2012). _Auditing and Assurance Services_ (14thed.). velocity Saddle River , NJ Prentice Hall.FASB. (2014).Apra. (2009). _Auditor Report._ Retrieved from http//www.apra.gov.au/Superannuation/upload/AuditReport_Vn2-Sept.pdf