Smackey Questions Essay examples

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Pages: 10

Worksheet for You Decide

Name Cathie Reid Course Code ACC555 Grade ___/ Date_12_/12_/12_


Q1: Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc.


The SEC does not have direct influence over the audit of Smackey Company because, Smackey is not a public held organization, they do not have assets in excess of $10 million, and they do not have over 500 stockholders; which are the requirements for public and privately held companies. The SEC does have indirect influence over the audit because all companies, whether public or private are required to comply with General Accepted Accounting Principles (GAAP) and the SEC plays a significant role in influencing these
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4. Finalization: At this point the audit team will complete and submit a report to Smackey’s management to inform them of any items that came up as a result of the audit; they should also review the work and results of the tests completed and decide what opinion to report based on the evidence uncovered (if any)

Q4: Describe Keller CPAs’ responsibilities related to communications regarding internal control matters. What internal controls issues do you identify?


I see sales transactions related objectives that would give rise for concern. These objectives are as follows (taken from the text):
1.Recorded transactions exist (occurrence).
2. Existing transactions are recorded (completeness)
3. Recorded transactions are correctly included in the master files and are correctly summarized (posting and summarization)
4. Recorded transactions are stated at the correct amounts (accuracy)
5. Transactions are correctly classified (classification)
6. Transactions are recorded on the correct dates (timing)
Specific internal controls that concern me are:
1.Best Boy Gourmet division has been wasteful
2.Kim overseas inventory, production and shipment of the products although she spends most of her attention with the Best Boy line
3. Henry alone prepares and approves all inventory records; Kim “takes his word for inventory levels”
4. Sales commissions are given based