Smackey Dog Food Essay

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Pages: 10
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Thea, nice work on the paper! You answered almost every question competently and thoroughly. The only question you might have done better on is Q10 for more detail on the rules that apply.. Thank you!

Worksheet for You Decide
Name Thea Zental____ Course Code AC 555_____ Grade ___ Date 02/19/2012

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

Solution:
The SEC (Securities and Exchange Commission) has a great influence on the audit of Smackey Dog Foods, Inc., which is conducted by Keller CPAs.
When auditing a publicly held company, auditors need to observe principles. The ethical principles of the American Institute of Certified Public Accountants (AICPA) Code of …show more content…
What internal controls issues do you identify?

Solution:
According to auditing standards and professional conduct the auditor is required that the auditor relay information, in writing, to management and those charged with governance, significant deficiencies and material weaknesses identified in an audit.

The following internal control issues were found as regards the audit for Smackey Dog Food, Inc. and thus have to be communicated to appropriate people within Smackey: 1. Granting of commissions to sales people based on estimated sales. This internal control issue presents risks as regards the company’s financial resources as sales people might be paid for sales not made, and there is no refund process for commissions paid for this type of sale. 2. Segregation of duties as regards the handling of inventory. With only one person assigned with the preparation and approving all inventory records, the changes of material misstatements are high. 3. Lack of control procedures and guidelines in handling returned dog foods which presented opportunities wherein employees take home returned items.
Lack of control procedures and guidelines in handling and recording accounts receivable. This is much more important now since a major client which represents 31 % of
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