Audtior Essay

1446 Words Nov 8th, 2011 6 Pages
Smackey Dog Food
Laton Berry
AC555
Due June 21, 2011
Jean Inabinett

Introductory
In order for me to audit this company, they would first have to produce a financial statement for me to audit. I will be providing what I have researched and what steps I would take if I were to audit Smackey Dog Food by using some audit procedures, tests, and reports. I will discuss if there were any rules violated and why. I will also discuss if there are any risk, and legal liability involving Smackey Dog Food. I will gather all of the evidence I find to determine my conclusion in what audit opinion I will give them. The audit opinion will be based off how high of material I think will affect Smackey’s Dog Food financial statements in more than on
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I would identify if there were any declines in the economy that could affect their business, do they have strategies in place to keep up with or stay ahead of their competitors, and if there’s any acquisitions or mergers taking place that could affect the fair presentation in the financial statements. The next thing I would look at would be their short-term debt paying ability, liquidity, ability to meet long-term obligations, and profitability ratios. By comparing their ratios to the industry’s average would let me know if there is a certain area, I need to focus on within their balance sheet. It also would not hurt to glance at their top competitors ratios who would be Nestle Purina PetCare Company, Del mote Foods, and Mars to see why their ratios stand out compared to theirs. If there are any changes in dollar amounts within the last couple of years meaning trends going up and down in their cash, account receivable, or gross profit.
Following the four Stages of Audit and Determine the Internal Control Weakness
Smackey’s overstating their accounts receivable by 10% is materiality. A lawsuit is pending for discrimination against an employee for not owning a dog would be a negative effect on the company. Inventory that Smackey has misstated and moved around would be an inherent risk. I do not think that Smackey’s financial reporting would be reliable and they are not following the rules of compliance with the

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