Auditing

Beginning the Audit Report

April 13, 2011

Apollo Shoes Inc,

Anderson, Olds, Watershed, CPAs would like to thank you for the trust and confidence your have placed in our auditing firm. Apollo Shoes’ decision to select our auditing firm is characterized by our professionalism and high quality of service rendered. The purpose of this letter is to explain how we plan to perform Apollo Shoes audit. According to Statements on Auditing Standards N.108/114, the auditor must adequately plan the work and must adequately supervise any assistants. After examining and understanding Apollo Shoes business process, we will contact your previous auditor. Therefore, contacting your previous auditor is part of the process to better understand your company and assess risks properly. After contacting your previous auditor you will receive an engagement letter. The engagement letter can be considered as an agreement between Apollo Shoes, Inc and our auditing firm. In accepting the terms covered in the engagement, we begin the process by collecting evidence. The management at Apollo Shoes, Inc will be asked to provide other information if needed. The information received helps to discover any problems or to identify risks that may occur in the financial statements. The next step consists of evaluating Apollo Shoes risk assessment and internal control. The objective is to identify potential threats that affect Apollo Shoes, Inc’s ability to meet its objective. We will implement risk assessments to help Apollo Shoes reduce risks as well as improve its financial performance. As required by the standard of public company accounting oversight boards, the auditors must examine transaction records and the effectiveness of internal control over financial reporting. They also perform the audit to ensure that the financial statements are free of material misstatement. As required by auditing standards, we will perform test to determine if there are any material misstatements in the...