Ac555 Week 7 You Decide Essay

1731 Words May 7th, 2013 7 Pages
Week 7 You Decide Course Project
Keller Graduate School of Management

Question 1 The Securities and Exchange Commission (SEC) would only have influence over Smackey Dog Foods, Inc. if they are a publicly listed company or if they register to become a publicly traded company. The SEC assists investors by providing reliable information to investors so they can make informed investment decisions. If Smackey Dog Foods, Inc. becomes a public company, they would need to provide financial statements along with an opinion about the financial statements by an independent public accountant along with the registration statement and subsequent financial reports (Arens, Elder, and Beasley, 2010).
Question 2 There are four things involved in
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Question 5 There are several types of confirmation Keller can use to verify Smackey’s accounts receivables. They are positive confirmation which is some type of communication sent to the account holder requesting they directly confirm whether the balance on the request is correct or incorrect (Arens, et al, 2010). There are two types of positive confirmation, a blank confirmation form where the recipient is asked to fill in the balance of the account or an invoice confirmation which is where an individual invoice is confirmed instead of the entire account. There is also a negative confirmation where the recipient is only requested to respond if the balance is incorrect (Arens, et al, 2010). Due to the fact that Smackey’s accounts receivable is a large part of the assets and they aren’t writing off any bad debt, Keller should use the blank confirmation form to determine if the balances of the accounts are correct.
Question 6 The major factors that affect the sample size for confirming accounts receivable are the weakness in internal controls within the sales department, and the improper statement of accounts receivable. With no control over the sales department, there is a higher risk of fraud by collusion between the salespeople and the companies that owe money to Smackey. With almost 20 percent of the receivables classified as 90 days or older, there is a higher risk of accounts receivable being overstated by uncollectable accounts

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