Essay on Dog Food

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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 …show more content…
Auditors are primarily concerned about controls over the followings: * Controls over the reliability of financial reporting: Smackey Dog Food Inc. does not have adequate separation of duties. Haney is involved both preparing and approving all the inventory records. Kim the manager should approve the records. * Controls over classes of transactions: auditors emphasize internal control over classes of transactions rather than account balances because the accuracy of accounting system outputs depends heavily on the accuracy of inputs and processing ( transactions). (2) Auditor responsibilities for testing internal control: Section 404(b) requires the auditor report on the effectiveness of internal control over financial reporting. A result of federal financial reform legislation passed by congress in July 2010 only larger public companies are required to obtain an audit report on internal control over financial reporting. Since Smackey Dog Food Inc. is not a large public company, they are not required to obtain an audit report on internal control over financial reporting from Keller CPAs.

Q5: You decide that you will address Smackey Dog Food, Inc.’s accounts receivables through confirmations. Discuss the various types of confirmations and what forms you will implement and why. Solution: The primary purpose of accounts receivable confirmation is to satisfy
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