As certified public accountant licensed to do audits in Oregon, we are happy that you have engaged our firm to audit your financial statements as of December, 31, 2007 and for the year then ended. This letter will substantiate our understanding of the arrangements regarding the financial audit we shall be making of the Hood Furniture Inc as of and for the year ended December 31, 2007. The audit scope is that we will audit the financial statements of the business activists, the books of accounts, the supporting documents and the financial systems, which collectively comprise Hood Furniture, Inc’s basic financial statements as of and for the year ended December 31, 2007. It is acknowledged that these financial statements and the underlying records and supporting documents are the representations of management that Hood Furniture Inc assumes full responsibility for their integrity and fairness, and that representation letters will be requested. It is also understood that you will complete the financial statements with our assistance by 3rd January 2008.
The objective of our audit would be to state an opinion as to whether the financial statements of Hood Furniture, Inc are presented fairly, in all material manner, in compliance with the US generally accepted accounting principles and to report on the fairness of the financial statements taken as a whole. It is expected that this engagement will meet the requirements of audit report users, the state of Ohio audit law and laws and regulations. The audit will be done in accordance with the generally accepted auditing standard adapted by the American Institute of Certified Public Accountant. The management of Hood Furniture, Inc is responsible for establishing and maintaining internal control and for compliance with laws, regulations, contracts and agreements. The objective of the internal controls is to provide management with reasonable but not absolute assurance that assets are safeguarded against loss from unauthorized use of disposition. Management is responsible for making all financial record and connected information available to the auditor on request in a timely manner and without restriction.
The Business plan on Report on Financial Statement Fraud Scheme
Crazy Eddie Electronics Stores a chattered company, traded under the symbol CRXY on the New York Stock Exchange. The company was under management of Eddie Antar family from 1971 until 1987 when Oppenheimer-Palmieri Fund (OPF) took over the company as a result of proxy bid (Sanburn, 2012). After a very short time; however, Oppenheimer-Palmieri Fund management decided to suspend the entire board of ...
We will examine and consider the internal control to determine our auditing procedures. We will obtain an understanding of the design of the relevant policies and procedures and whether they have been placed in operation, and we will assess control risk. We clarify that compliance with the laws, regulations, contracts and grand agreements applicable to Hood Furniture Inc. is the responsibility of Hood Furniture. We will also perform tests of compliance with certain provisions of laws, regulations and contracts. This however, will not be the purpose of the entire audit procedure. The objective of our engagement is a financial audit of the financial statements and on its completion and based on our finding, the stating of an opinion on such financial statements in accordance with generally accepted auditing standard. However, if for some reason we are not able to finish the audit or are not able to form an opinion, we shall notify you. In addition, we will prepare your 2007, federal and state income tax returns, using the information you provide to us.
We may ask for clarifications of some items, but we, will not verify the data you submit. It is your responsibility to provide information required for preparation of complete and accurate returns. You should keep all documents, cancelled checks and other data that support your reported income and deductions. They may be necessary to prove accuracy and completeness of the returns to the taxing authority. As you are responsible for the returns, you should go through them thoroughly before you sign them. Our fee for the audit will be our actual cost and will range between $20,000 and $25,000 provided the financial statements are available with us on 4th January 2008. The fee for the tax services will range between $7,500 and $10,000. If these comments and arrangements are approved by you, please sign below and return the agreement to us. We look forward to a meaningful association and the opportunity to provide the services included in this engagement.
The Essay on Audit Risk
Introduction 1. The purpose of this International Standard on Auditing (ISA) is to establish standards and provide guidance on the concept of materiality and its relationship with audit risk. The auditor should consider materiality and its relationship with audit risk when conducting an audit. “Materiality” is defined in the International Accounting Standards Board’s Committee’s “Framework for the ...
How The Knowledge Will Assist In Developing A Knowledgeable Perspective About The Financial Statements. How The Knowledge Increases Or Decreases Or Mitigates Potential Issues Of Material Misstatement. Industry Conditions The industry is highly competitive and this means the profit margins will be low unless a segment with higher margins is tapped. The profitability in the financial statement will reflect market success. If Hood Furniture is not operating very profitability there may be pressures to show a higher profitability through misstatements. Regulatory environment the requirements of US Environmental Protection Agency standards must be fulfilled. Some compromises with the standards may take place to meet the low price requirements. Other external factors affecting the business the supply of wood may come down because of global environmental awareness. The company may be forced to make losses and misstatements may be made to cover these losses. The client’s business operations Customized furniture requires a different work place and work design. There may be cost increases that may increase the risk of misstatements.
The client’s investing activities and financial activities; There is a need for reducing the inventory and reducing the operating cycle. There may be misstatements to show a lower cost. This increases the risks. The client’s financial reporting activities. The current accounting system is expected to be replaced in 20X4. This is a cause of concern. This increases the risk that misstatements may be made in the new system. On the other hand if the new system is better then chances of material misstatement will come down. The client’s objectives, strategies, and related business risks. The client is bent on fast growth and may be willing to forego integrity. This increases the risk that there may be material misstatement to show a better picture than what it really is. How the client measures and reviews the entity’s financial performance. Market expansion. This means that the business may turn unprofitable because of competition. The market expansion objectives may be achieved by suppressing unprofitable or low profitable operations.
The Business plan on Cash Flow Financial Information Business
The financial statements are suggested as the intermediate component between the reporting entity and report users in the reporting process. The major objective is argued as to provide useful information about the reporting entity'I 1/4 financial performance and financial position to a wide range of users. Thus they can make economic decisions as well as assess the stewardship of the entity'I 1/4 ...
