Dog Food

In: Business and Management

Submitted By littlered
Words 1242
Pages 5
Worksheet for You Decide

Name ____________ Course Code _________ Grade ___/ Date__/__/__

Questions:

Q1: Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc.

Solution:

Smackey Dog Foods is not a publicly traded company, so it’s not required to follow SEC regulations. However, the auditors are required to follow audit standards. (AICPA Code of Professional Conduct, Sarbanes-Oxley Act, and SEC rules)
Therefore, SEC has great influence over the audit of Smackey Dog Foods. Inc.

Q2: Discuss the essential activities involved in the initial planning of an audit. How do these all specifically to the Smackey Dog Food client?

Solution:

Initial auditing planning involves 4 things: (1) The auditor decided whether to accept a new client or continue serving an existing one. (2) The auditor identifies why the client wants or needs an audit. (3) The auditor obtains an understanding with the client about the terms of the engagement. (4) The auditor develops an overall strategy for the audit, including engagement staffing and any required audit specialist.

(1) Client acceptance: since this is the first time Keller CPA audit Smacky Dog Food Inc , the firm should investigate the company to determine its acceptability. First check Smackey Dog Food’s standing in the business community and financial stability. Keller CPA firm should use considerable caution in accepting new Smackey Dog Food in newly formed, rapidly growing business,
(2) Identify client’s reasons for audit: the likely statement users and their intended use of the statements. Smackey Dog Food Inc needs the auditing because of the need of the loan. The banked demands an audit of the corporate financial statements before releasing another loan ot the company. This will affect the auditor’s acceptable audit risk.
(3) A clear understanding of the terms…...

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