Audit Report Apollo Shoes

Mr. Lancaster, The firm of Anderson, Olds, and Watershed is pleased to receive your notification to proceed with the audit and look forward to working with you. From the Audit Committee meeting minutes, we understand that Apollo Shoes requires help with the yearly audit because the former CPA firm withdrew unexpectedly (University of Phoenix, n.d.). Anderson, Olds, and Watershed will conduct the audit and “prepare the state franchise tax returns as well as the federal tax returns” (University of Phoenix, n.d., p. 9). Because of Apollo’s previous work with Smith and Smith, Anderson, Olds, and Watershed is “required by auditing standards to communicate with” Smith and Smith (Arens, Elder, & Beasley, 2012, p. 212). Ms. Wardlaw will be the manager on the audit. As the firm partner for the audit, I am also available if you have any problems or require any assistance. Enclosed, please find our engagement letter, engagement checklist, and an outline of timeframes and milestones for the audit.
With Regards,
Mr. Anderson
Anderson, Olds, and Watershed

ANDERSON, OLDS, AND WATERSHED, CPAs
Audit Engagement Letter

November 3, 2007
Mr. Larry Lancaster, Chairman, President and CEO
Apollo Shoes
4604 Oakley St.
Macon, Georgia 31212

Mr. Lancaster,

Anderson, Olds, and Watershed would like to confirm our understanding of the arrangements for our audit of Apollo Shoes financial statements for the year ending December 31, 2007.
The firm will audit the financial statements for that year in order to express an opinion “on the fairness with which they present, in all material respects, the financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America” (Arens, et. al, 2012, p. 214).
The firm will conduct the audit in accordance with the generally accepted accounting principles (GAAP) in the United States of America. GAAP standards require the firm to obtain

References: AICPA. (n.d.) Sample review checklist. Available from http://www.aicpa.org/InterestAreas/FRC/Review/DownloadableDocuments/ReviewServices_Sample_Review_Checklist.pdf Arens, A. A., Elder, R. J., & Beasley, M. S. (2012). Auditing and assurance services: An integrated approach (14th ed.). New York, NY: Pearson/Prentice Hall. University of Phoenix. (2007). Apollo Shoes Case. Retrieved May 2, 2013 from: University of Phoenix, week one, ACC-546 Auditing Course website.