Auditing Introduction Letter to Apollo Shoes, Inc.
June 3, 2013
Apollo Shoes Inc.
100 Shoe Plaza
Shoetown, ME 00001
To the Board of Directors of Apollo Shoes, Inc.:
Thank you for choosing Anderson, Olds, and Watershed (AOW) to audit your company. It is an honor to present you with an introduction to our auditing and assurance services. It is the firm’s belief for our clients to understand our qualifications and the benefits to the services we provide before providing the services. Three types of auditing services are provided by AOW. The first is an operational audit. Operational audits evaluate the efficiency and effectiveness of the company’s operating procedures and methods (Arens,
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The review consists of a lower level of assurance requiring less evidence. The audit is most common as it is required for publically traded companies. It results in a written report expressing the accordance of the applicable accounting standards. An audit of the historical financial statements can help to identify fraudulent activity, especially considering the need to change auditors. The audit of internal controls over financial reporting follows Section 404 of the Sarbanes-Oxley Act requiring public companies to report management’s assessment of the effectiveness of internal control (Arens, et al., 2012). It helps to identify areas of weakness and reduce the likelihood of material misstatements in the future. A final attestation service that may benefit Apollo Shoes Inc. is the SysTrust service. This is a service provided by AOW to provide assurance to the company and third parties about the reliability of the information system generating real-time information. Since Apollo Shoes purchased a new system in July, this may be a service you are interested in to provide assurance after the change in auditors. AOW evaluates the computer system using Trust Services criteria to determine if controls over the system exist (Arens, et al., 2012). Those controls are tested to see if they are operating effectively during a specified period.
As the primary auditor, my role is to provide these audit and