Assignment 1 Essays

1467 Words Jan 18th, 2015 6 Pages
Auditing I | ACG 4632.591S15

Assignment 1
Landon Graber
Maya Pham
Melanie Pratt
Robin Michael Schneider

LILTS BERGER & ASSOCIATES

4-1

Certified Public Accountants

CW 11/23/2015

Ocean City, Florida 33140

October 30, 2015

Mr. Donald Phillips, President
36 Clearwater Lake Road
Ocean City, Florida 33140

Dear Mr. Phillips:

This letter is to confirm our understanding of the terms of our engagement as the auditors of Ocean view Marine Company for the year ended December 31,
2015.
Services and Related Report
As you have requested, we will audit the financial statements of Oceanview
Marine Company, which comprise the balance sheet for December 31, 2015, and the related statements of income, changes in stockholders’ equity, and cash flows
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Charles Ward, the engagement partner, has already completed the CLIENT ACCEPTANCE FORM in the permanent file. Based on the information you studied in the Permanent File and the unaudited financial statements included in the Current Workpapers (workpapers 1-1 through 15), evaluate the client acceptance decision. Organize your answer using the two-column format shown below.
a. Indicate two favorable factors most important to the client acceptance decision (one factor has been provided as an example).
b. Indicate three concerns you have about accepting Oceanview as a client.
Factors Favoring Acceptance
1. Responses to inquiries of predecessor auditor were complimentary about Oceanview.
Predecessor auditor spoke highly of
Oceanview's employees' integrity, competence, and dedication to running a successful business.
2. There has recently been an upgrade of accounting software and hardware that contribute ti a stronger internal control 3. Strong, growing + historically stable company Concerns about Acceptance
1. Oceanview is trying to buy out their investor, Southern Enterprises, which may create cash shortage.

2. Oceanview has stated that they may have issued with the investors putting caps on officers’ salaries + fringe benefits which could indicate possible overcompensation 4. A lawsuit is currently pending due to a customer’s boat that sank. This could be a

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