You Decide Smackey Dog Food Inc. Essay

1922 Words Jun 5th, 2013 8 Pages
SMACKEY DOG FOODS, INC.

Smackey Dog Foods, Inc., is a privately owned dog food manufacturing company, which was started by three sisters, Sarah, Kim, and Jillian, in the kitchen of their suburban Chicago home. They started by manufacturing a natural dog food with ingredients they bought from a local grocery store. These products were discovered by local pet stores and small grocery stores which also became distributors of their products. A larger facility was then needed as the demand steadily increased for their products. With this expansion the sisters were required to hire more workers and manage a growing company. Compared to their competitors’, Smackey Dog Foods, Inc. sales were on an upward growth trend. With increasing
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By maintaining objectivity and being free of conflicts of interest and by being independent in fact and appearance, we, the audit team members of Keller CPAs, are required to be objective and independent. (1)

The essential activities, as they relate to Smackey Dog Foods, Inc. that are involved in the initial planning of the audit are as follows: * An understanding of the business and industry of Smackey Dog Foods., Inc. Keller CPAs has never audited a specialized dog food manufacturer, therefore, we have to use the experience we have in auditing other food manufacturers as we are planning and executing this audit. * Assessing the business risk of the client. Smackey’s best dog division has a significant amount of waste. The high level of waste and returns presents potential business risks and material misstatement risks in this audit of Smackey Dog Foods, Inc. * Performing preliminary analytical procedures. The performance of Smackey Dog Foods, Inc. has to be compared with the specialized dog food manufacturing industry to further support the initial assessment of business risk. These analytical procedures help the audit team identify the areas where there is a risk for exceptionally high misstatements. (1) * Setting materiality and assessing acceptable audit and inherent risk. An acceptable level of materiality needs to be set by the audit team, but issues such as Inventory

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