Audit Process Letter

Audit Process Letter

Elizabeth Grieco

ACC/546

February 18, 2013

Hillary D. Edmondson

Audit Process Letter

TO: Apollo Shoes, Inc.

FROM: Elizabeth Grieco, Auditor-In-Charge

Anderson, Olds, and Watershed (AOW)

DATE: February 18, 2013

SUBJECT: Beginning the Audit Process

SUMMARY:

This memo includes information regarding how I will begin the audit of Apollo Shoes, Inc. Attached to this memo is the engagement planning checklist, the engagement letter itself, and an outline of timeframes and milestones for the audit. Thank you for choosing Anderson, Olds, and Watershed to complete your audit.

PLANNING THE AUDIT:

Adequate audit planning is the first generally accepted auditing standard (GAAS). Proper planning of an audit enables the auditor to obtain enough evidence for the circumstances, to help keep costs at a reasonable level, and to avoid misunderstandings with the client (Arens, Elder, & Beasley, 2012). There are eight major parts of audit planning, seven of which are intended to help the auditor develop an effective and efficient overall audit plan and program, which is the eighth part (Arens, Elder, & Beasley, 2012).

Accept Client & Perform Initial Audit Planning:

The first part of planning an audit is accepting the client and performing initial planning activities. These activities include:

* Reviewing financial information about the client

TO: Apollo Shoes, Inc.

* Making inquiries of other people with whom the client does business, e.g., bankers, legal counsel, etc.

* Attempting to communicate with the predecessor auditor

* Considering if the audit engagement would require any special attention or involve any unusual risk

* Considering the need for any special skills (Louwers, Ramsay, Sinason, & Strawser, 2007).

These activities help the auditor to understand the client’s reasons for the audit, which will be documented in an engagement letter. I have attached our engagement letter at the end...