Apollo Shoes

Upon the completion of auditing the financial records of Apollo Shoes, Inc. it has been confirmed that there has been sufficient evidence obtained to support the audit opinion. There is a concern pertaining to the results of last year’s audit, because the audit was conducted last year by Smith and Smith CPA’s and VP of finance Mr. Unum has requested that we do not contact Smith and Smith.
After careful review it has been determined that the issuance of an unqualified audit report would be appropriate. There were errors or deviations discovered during the audit involving financial statements ending December 31, 2006, and 2007, but it was not a departure from GAAP and therefore unnecessary to provide an explanatory paragraph. Because the audit evidence is deemed sufficient, the audit report will follow the standard unqualified audit report.
The purpose of this audit report is to primarily communicate the findings on Apollo Shoes Inc. financial statements to safeguard third parties including the stockholders, investors, lenders, and creditors of the client. These third parties usually rely on the report for the assurance that the financial statements of Apollo Shoes Incorporation are fairly presented according to GAAP. The evidence gathered for the audit was accumulated in correspondence with the audit procedure created by and approved by Darlene Wardlaw. Several statistical techniques were used including random sampling. In additions, several analytical procedures were performed including the calculation of common-size financial statements and dollar amounts including percentage changes, comparing Apollo’s numbers with close competitors, and other financial ratios.

Anderson, Olds, and Watershed
Certified Public Accountants
1358 Park Plaza East
Wilson, Main 80110
842/555-2849

Independent Auditor's Report

To: The Board of Directors and Stockholders
Apollo Shoes, Inc.

Covering the business year ending in December 2007, ANDERSON, OLDS, and WATERSHED have audited the accompanying balance sheets of Apollo Shoes Inc. as well as retained earnings, cash flows, and the related statements of income for the year ending December 31st 2007. These financial statements are the responsibility of the company’s management. The management of Apollo Shoes Inc. is responsible for maintaining internal controls that cover all financial statements in an effective nature, and for assessing internal control associated with financial reporting. Our responsibility is to express an opinion on these financial statements based on our audit.
Anderson, Olds, and Watershed conducts all audits according to GAAP standards and methods such as observation, inspection, inquiries with conformation, and a duty toward the emphasis of reliability and relevance. The audit of the financial statements was planned and performed in such a manner to provide reasonable reassurance that the statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
In our opinion, the financial statements referred above are fairly presented, and accurately show the financial position of Apollo Shoes Inc. as of the 31st of December 2007 and the referred statements have been prepared and are in accordance with GAAP.