The audit report and internal control evaluation. Apollo Shoes Inc Essay

The audit report and internal control evaluation. Apollo Shoes Inc - Essay Example The auditing process of financial statements and evaluation of internal control systems of Apollo shoes was perfect. This is a report of findings, and recordings of the audit firm as of 31st December 2011. The audit follows the basis on the international Standard of Auditing and general accepted audit standards of United States of America. Key target of the audit is to obtain a reasonable assurance on whether there are any material misstatements on the financial statements. This will lead to drawing an opinion to the shareholders regarding the state of financial records (Ainapure, 2011, p. 26). Background Apollo shoes Inc. is a leading company in the United States of America. In reference to the evaluation conducted by the audit company, the Apollo management team is highly competent with certified employees. The management team comprises of 13 members and an executive committee of three members. The company's revenue of the year ended 31st December 2011 $108 million. This is a 6% in crease in reference to the working papers of previous auditor. It also has over 600 full time employees, 3500 part-time graduates, and 1000 undergraduates. The company has many branches all around the States to increase the net revenue. In this financial year, the company won different awards as a result of its quality management strategies. This has raised the creation of a sustainable business environment in such a competitive economy. It proves to be among the best performing companies in this line. Accounting sampling and testing procedures The audit entailed different sampling and testing procedures. This is to provide material evidence before presenting the opinion to the shareholders and directors. Tracing the flow of transactions and authorization is the crucial task in auditing. This is because auditors will identify transaction initiation and completion by the company. The audit team also made a detailed compliance test seeing whether all guidelines within the company are functional. A test on the control system is pivotal in auditing; its helps the auditor to identify the extent of other tests. In reference to the audit team, it is evident that Apollo shoes management is competent in implementing these tools. This implementation is responsible for immaterial gaps in the company. The auditing team gives all recommendations and management action plans to cover these gaps. Risk Exposure From the audit analysis, internal auditors perform detailed risk analysis targeting all areas of concern of the company. The key target areas are cash inflows, grant activities, operating systems, level of external rules and regulation among others. The objective of evaluating risk exposure through the internal audit team is identifying all entities that should receive audit attention (Ainapure, 2011, p. 32). Scope The main aim of auditing the statements is to represent the shareholders in affirming the fairness of the statements. It also helps in determining whether th ey are in accordance with the accepted accounting standards of USA. The audit includes testing, examining basis, evidence on the supporting information, and disclosing the financial statements to all parties. It also includes a review of administration grant, safety, network security, and service centre. It covers the period from 1st January 2011 and 31st January of the same year. This is in reference to Apollo Shoes financial year. The report has made a combination of analytical review procedures on the financial statements (Ainapure, 2011, p. 36). Opinion In accordance with the financial statements presented by the management of Apollo shoes Company, the company’s financial statements are in line with the USA accounting standard. This is in reference to the financial records of the year ended 31st January