Engagement Letter Apollo Case Essay Example for Free

Engagement earn Apollo Case EssayAnderson, Olds and Watershed (AOW) give audit the balance sheet of Apollo Shoes as of celestial latitude 31, 2011 and the related statements of income, retained earnings and cash flows for the year then ended. Our audit will be conducted in accordance with the Standards of the Public Company Accounting superintendence Board (PCAOB). Our audit will include examining, on a test basis, evidence supporting the amounts and disclosures in financial statements, assessing the accounting principles used ad evidentiary judgments and estimates made by management, as well as evaluating the overall financial statement presentation. An audit includes obtaining an commiserateing of internal control sufficient to plan the audit, including qualification risk assessments, and to determine the nature and extent of audit procedures to be performed. An audit is non designed to provide assurance on internal control or to identify control deficiencies. However, w e are responsible for communicating to the Board of Directors of Apollo Shoes signifi give the bouncet deficiencies and material weakness in internal control that come to our financial aid during the course of our audit.AOW is required to obtain reasonable assurance that the financial statements are free from material misstatements, whether caused by error or fraud. However the audit does not guarantee the accuracy of the financial statements. Even though the audit is properly planned and performed in accordance with the PCAOB standards, an unavoidable risk exists that some material misstatements may not be detected due to inherent limitations of an audit, together with the inherent limitations of internal control. Consequently, our audit is not designed to detect errors or fraud that is rectangular to the financial statements.At your request, but pending approval by your Board of Directors, we will prepare all required federal tax returns and the state licence tax returns. We w ill as well provide your staff with a list of schedules needed by our staff during the audit. The delivery dates have been discussed and mutually agreed upon. We understand that your staff will prepare all schedules in the package, all financial statements and notes thereto, and the Form 10-K for our review. The scope of our services however, does not include breeding of any of these statements.GA-1.2FeesOur account for services set forth in this Engagement Letter, which we have estimated will total $750,000 discussed with you on October 18, 2011.For the services rendered the due date of the audit report will be February 15, 2012.Matters that can cause ladder in excess of fee estimateWe want you to receive the maximum value for our professional services and to cover that our fees are reasonable and fair. The following matters explain what issues arise most frequentlyChanging requirementsAlthough we attempt to plan our work to anticipate the requirements that will affect our par ticular date, lead types of situations make this difficult. Sometimes, these new requirements are not communicated in time for us to anticipate their effects in our preliminary planning. Secondly, in spite of our anticipation and planning, the work necessary to comply with new requirements may be underestimated. Finally, in some instances, you may decide that it is advantageous to you to have them applied immediately.Incorrect accounting applications or error in your recordsWe generally form our fee estimates on the expectation that your accounting records are in good order so that our work can be completed based upon our normal testing and other procedures. Should we find numerous errors, incomplete records or disorganized bookkeeping methods, we will have to do additional work to determine the necessary corrections have been made and properly reflected in the financial statements.Lack of audit facilitation or timely preparationTo minimize your costs, we plan the means by which you r personnel can facilitate the audit (e.g., what schedule they will prepare, how to prepare them, the supporting documents that need to be provided). We also discuss matters such as availability of your key personnel, deadlines and working conditions. Therefore, if your personnel are unable, for whatever reason, to provide these materials on a timely basis, it may comfortably increase the work we must do to complete the combat within the established deadlines.Unforeseen eventsEven though we communicate frequently with clients and plan our engagement with management and their staff, unforeseen events can occur. Examples include the following accounting problems, litigation, changes in your business or business environment, contractual or other difficulties with suppliers, third-party service providers, or customers, etc. when those circumstances occur, additional time is needed to provide you with assistance and complete our engagement in accordance with professional standards.GA-1 .3AuthorizationThis Engagement Letter sets forth the entire understanding between Apollo Shoes and Anderson, Olds and Watershed regarding the services described therein.Please confirm your acceptance of this Engagement Letter by sign language below and returning one copy to us in the enclosed self-addressed envelope. We appreciate the opportunity to continue to work with Apollo Shoes and ensure you that this engagement will be given our closest attention.