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2. Apollo Shoes Case Assignment Using the Apollo Shoes Case

Customer Question

2. Apollo Shoes Case Assignment Using the Apollo Shoes Case materials, available under the Assessment section of Week Three of your page, complete the "Inventory" audit section. Before completing this section, review the "Planning" section with emphasis on the Workpaper Indexing, Trial Balances, and Apollo Shoes Minutes; and the "Accounts Receivable" section with emphasis on the Audit of Accounts Receivable - confirmations.

I have to do the payroll section of the case, I can send you the info it you can help me. I need to have it by Friday night. I know this is not much time, but I really do not understand it
Submitted: 8 years ago.
Category: Homework
Expert:  Finance Expert replied 8 years ago.



I can do it for you.


Please mail the other details.



Finance Expert

Customer: replied 8 years ago.
<p>Aparently this was done by someone else in the site and the information is out their. their is other areas to look at and is long. I will see if I can cpture it.</p><p> </p><p> </p><p>Review the objectives from Week One, and discuss additional insights and questions that may have arisen. </p><ul><li>2. Apollo Shoes Case Assignment </li></ul><p>Using the Apollo Shoes Case materials, available under the Assessment section of Week Two of your page, complete the following audit sections:</p><ul><li>a. Revenue and Expenses</li></ul><p>Before completing this section, review the material in the "Planning" section with emphasis on the Trial balances and Apollo Shoes Minutes; and the "Accounts Receivable" section with emphasis on the Audit of Accounts Receivable - confirmations.</p><ul><li>b. Payroll</li></ul><p>Before completing this section, review the material in the "Planning" section.</p><p>These assignments are due in Week Two.</p>
Customer: replied 8 years ago.
Aparently should look like this but I am not sure if this answer is correct.

Apollo Shoes Inc.
Payroll Processing
December 31, 2007
Weakness     Test of Control Audit Procedures     Compensating Substantive Procedures
Payroll is notified of any changes by a payroll change form received from personnel clerk     On a test basis vouch payroll transaction to supporting documentation. (Select a sample payroll change form and verify change in sample personnel file)     
Hourly employees time cards are approved by a supervisor     On a test basis ouch payroll transaction to supporting documentation. (Select a sample time card and verify supervisor’s signature)     
Checks are prepared in the Accounts Payable Department     Determine that accrued payroll payables are the obligation of the entity
Recalculate accrued payroll liabilities at year-end to underlying payroll records.     
Treasures reviews payroll register and take home sheets, compares to checks, and signs checks.     On a test basis, trace data from time cards to payroll register     
Payroll Dept maintains employees’ payrolls records.          There exist no additional copy of records and no check system to verify the accuracy of any changes to employee files.

Supervisor approved time cards are given payroll dept to prepare payroll register and take home sheets          The only copy given to payroll no copies exist to show accuracy of time cards in the event of a discrepancy in time reporting.
In obtaining a copy of the year-end payroll register and tie in the ending numbers (earnings for year) to the trial balance it shows an amount of 16,197,225.43 for administrative salaries and 4,720,715.56 for warehouse salaries. These amounts match on both the payroll register and the trial balance for 2007. In comparing the salaries amount from 2006 it shows that 16,875,305.98 for administrative salaries and 4,633,383.82 for warehouse salaries. In the analytical procedure of comparing current year amounts to previous years about it shows that the amount expensed for administrative employees decreased by .96% and increased by 1% for warehouse salaries. Based on the information the ratio shows less than a 1% change so the amounts reported are reasonable and accurate.

Customer: replied 8 years ago.

Date: Thu, 25 OCT 2007 00:42:35 +0000
From: "Darlene Wardlaw" <[email protected]>
Subject: Upcoming Apollo Shoes Engagement
Attachment: <<AudComMins-101807.doc>>



Well, first let me congratulate you on your recent promotion. Although we have not worked on an engagement together before, I have heard many good things about you. I look forward to working with you on the new Apollo Shoes engagement.


I understand that this is your first engagement to in-charge. XXXXX XXXXX (aka "Uncle Arnie") will be the engagement partner; he is pretty sharp so you'll have to stay on your toes. As engagement manager, I'll try to help out as much as I can. Understand, however, that I am managing four other busy season engagements, so my interaction time with you will be limited. For now, I want you familiarize yourself with Apollo Shoes and help me out by doing the following:


  • 1. SEC Filing: I have asked Larry Lancaster, President and chairman of the Apollo Shoes board of directors, to send you a copy of last year's (2006) 10-K filing with the SEC. Review the information when you receive it, as it is one of the most important sources of information about a company.
  • 2. Audit Committee Meeting: I have attached the minutes of an audit committee meeting that occurred last week. Please review the minutes of the meeting and draft an appropriate engagement letter (label it GA-1, for General and Administrative, page 1) addressed to Mr. Lancaster. (Since this is our first year on the engagement, you might want to check one of your old auditing textbooks for an example.) I'll review the letter before getting Arnold to sign it.
  1. Audit Team: Based upon the information that you glean from 1 and 2 above, do you see any need for special business knowledge in regard to the basic type of business and products Apollo manages? Do you see any need for special audit or accounting expertise for any of the work that we have agreed to perform? In other words, since you'll be in the trenches, what kind of expertise do you want on your audit team? Just write a brief audit staffing memo (GA-2) telling me what expertise you need to complete the audit and I'll see if I can get them assigned to the audit team.
  2. Scheduling: We are going to have to work around your other engagements, but we have you tentatively scheduled for one week in October (next week) for bringing you up to speed on Apollo and its industry, and five straight weeks beginning the last week in December for engagement planning, internal control evaluation, and substantive testing.


Finally, since most of our interaction will be by e-mail, please forgive me if I give you too much detail. Since we haven't worked together before, I'd rather give you too much than too little until we get used to working together.




Minutes of the Audit Committee, Apollo Shoes

October 18, 2007

Present at Meeting: XXXXX XXXXX, CPA (partner in charge of the audit); Darlene Wardlaw, CPA (engagement manager); Eric Unum (Apollo 's vice president of finance); Mary Costain (Apollo 's treasurer); Samuel Carboy (Apollo 's controller); and Karina Ramirez (Apollo 's director of internal audit). The three members of the audit committee of the board and the corporate secretary also were present, but they did not enter into the conversation.

Mr. Unum (VP finance): Well, I want to welcome the auditing firm of Anderson, Olds, and Watershed, CPAs to what we call the "Apollo Shoes Experience." After our old auditors, Smith & Smith, CPAs, unexpectedly withdrew from the engagement, we were very happy to have a firm of your quality to come aboard.

Mr. Anderson (partner on the audit): Well, we are always looking for high quality clients. By the way, why did your previous auditors resign?

Mr. Unum (VP finance): I'd rather not talk about it. Arnold, will Darlene be in charge?

Mr. Anderson (partner on the audit): Yes, and she will be assisted by several of our best staff, including a tax specialist and an information systems auditor. We need to keep up to date on your computer systems. Back to your previous auditors, with your permission, we would like to contact them.

Mr. Unum (VP finance): Well, we'd rather you didn't. There may be some litigation since they withdrew from the engagement with so little notice. Is it necessary for you to speak with them to accept the engagement?

Mr. Anderson (partner on the audit): No, not really, but it does raise some concerns for our firm.

Ms. Costain (treasurer): In the past, we have never had any unpleasant discoveries of embezzlement or theft, but we always want to be vigilant. Will you plan enough in-depth auditing to give us assurances about errors and frauds in the accounts?

Ms. Wardlaw (manager on the audit): We will follow audit standards and base our audit work on samples of transactions. We plan the work to look for major errors and frauds in the accounts, but cleverly hidden schemes might not be discovered. According to the Sarbanes-Oxley Act of 2002, we will need to test the effectiveness of Apollo's internal controls, as well as provide you the usual separate management letter on related findings.

Ms. Ramirez (internal auditor): Darlene, I agree, it's hard to uncover clever schemes. While I am new to Apollo, none of the projects that I have undertaken this year shows anything amiss, other than normal human error types or mistakes.

Ms. Costain (treasurer): This year, we want to add some work to the audit. I am short on staff time and need to have you prepare the state franchise tax return as well as the federal tax returns.

Ms. Wardlaw (manager on the audit): Our tax staffperson can do the state and federal returns, and I will have them reviewed by Maria Olds, our tax partner. In order to perform the tax work, Sarbanes-Oxley requires that we get prior approval from the audit committee to perform both the tax work as well as the audit.

Mr. Anderson (partner on the audit): I assume you also want us to review the 10-K filing material?

Mr. Unum (VP finance): Yes. Will you need any staff help from us?

Ms. Ramirez (internal auditor): Last year, Apollo was able to save on audit fees when my staff prepared a stack of schedules and analyses that our previous auditors needed.

Mr. Wardlaw (manager on the audit): Yes, Karina, I will give you a list of schedules for various accounts. I will appreciate your having them ready when we start fieldwork in mid January.

Mr. Carboy (controller): Speaking of being ready, we will be able to give you a trial balance the day after December 31.

Mr. Unum (VP finance): How much is this going to cost us?

Mr. Anderson (partner on the audit): It is difficult to give you a fixed fee deal, but my estimate, considering the additional work, is $750,000. Darlene will let you know immediately if problems arise to cause the work to be more extensive.

Mr. Unum (VP finance): Thank you. This has been a productive meeting of the minds. We look forward to your getting started next month.


Meeting ended 5:30 p.m. /s/ Jeff Chesnut, Secretary



Customer: replied 8 years ago.
If you have an email I can email the document but is 22 pages
Expert:  Finance Expert replied 8 years ago.



I can do it, but the price for this is quite less. Please let me know that how much more you can pay for it.