Apollo Shoes Case Assignment Using the Apollo Shoes Case materials, available under the Assessment section of Week Three of your page, complete the...

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 just need help with this part::::::: 4. Next, judgmentally sample a number of unit costs from recent invoices and tie them to the Inventory Status Report. 5. If the numbers agree, tie the Inventory Status Report into the Inventory Lead Schedule. 6. Lastly, tie the lead schedule into the Trial Balance. Below are the information needed to complete this assignment.Work Paper Indexing Date: Mon, 29 OCT 2007 06:42:35 +0000 From: "Darlene Wardlaw" <> Subject: Upcoming Apollo Shoes Engagement Apollo denied our request to speak with the predecessor auditors because of "litigation concerns." I've looked at the 8-K filed by Apollo and the auditors referenced in the 10-K. I didn't attach a copy because it didn't say much, just something about "incongruent goals," blah, blah, blah. Against my advice, Arnold decided to accept the engagement anyway. Keep your eyes open! The good news is that the predecessor auditors, Smith and Smith, CPAs, have a good reputation, so you can use last year's audited numbers from the 10-K. The bad news is that we don't have access to prior year working papers. You'll need to come up with programs for the substantive audit procedures for each of the functional balance sheet areas (indicated with an asterisk (*) below). You can download copies of the audit programs from AuditNet (www.auditnet.org) under "Auditors Sharing Audit Programs" or get them from an old auditing textbook. My preference is to place the audit programs at the beginning of each section. Label the sections as follows: General and Administrative (Planning) Revenue/Collection Cycle Internal Control Evaluation Purchasing/Disbursements Internal Control Evaluation ICP series Payroll Internal Control Evaluation Trial Balance/Financial Statements/Adjustments/Footnotes Cash Substantive Workpapers Accounts Receivable Substantive Workpapers Inventory Substantive Workpapers Prepaids Substantive Workpapers Property, Plant and Equipment Substantive Workpapers Other Assets Substantive Workpapers Current Liabilities Substantive Workpapers Notes Payable Substantive Workpapers Stockholders' Equity Substantive Workpapers Revenue Substantive Workpapers Expenses Substantive Workpapers Because we are so understaffed during busy season, you are going to have to perform the bulk of the audit yourself. I was only able to get you a spring intern (Bradley Crumpler) from Caledonia State University (heck, I didn't even know they had an accounting program!). He is the only unassigned person in the office right now. Because I am unsure of his training, I suggest that you only use him for "grunt work." Also, I checked into the background and experience of Karina Ramirez, Apollo's Internal Auditor. Apparently, she was an auditor with a Big 4 firm for 8 years before coming to Apollo and has served on the state CPA society's ethics committee. I also went through her work papers; they appear to be top-notch. Lastly, she reports directly to the Audit Committee, so we can rely on her to be objective I think we can rely on her work during our engagement. DW P.S. Thanks XXX XXXXXXXX the engagement letter. I only had to make a couple of changes before Arnold signed it. Date: Tue, 8 JAN 2008 08:49:35 +0000 From: "Darlene Wardlaw" <> Subject: Apollo Shoes Trial Balances Attachments: <<2007 Apollo Trial Balance.xls>>, <<2006 Apollo Trial Balance.xls>> I got a copy of Apollo's 2007 year-end trial balance (attached) from Sam Carboy, Apollo's Controller. I also got a copy of last year's 2006 audited trial balance from Karina. I've attached copies of both to this e-mail and also posted them to the AOW intranet where you can also download them. I received it a week after he promised it to me, so apparently it wasn't as clean a year-end close as he expected. I want you to put the numbers into three spreadsheets (one for the comparative (i.e., two-year) balance sheet (A-1), one for the comparative income statement (A-2), and one for the comparative statement of cash flows (A-3)). I know that everyone has a particular style of workpaper formatting, but my preference is for the following columns for the income statement and balance sheet: Acct W/P Current Year Current Year (Audited) DW Credit $1,262,819.88 $3,012,000.00 $164,000.00 $4,633,118.09 $0.00 $29,470.32 $1,318.69 $583.99 $6,033.01 $2,815.47 $1,318.69 $583.99 $10,000,000.00 $8,105,000.00 $7,743,000.00 $1,899,120.65 $246,172,918.44 $0.00 $204,302.81 $283,238,404.03 Credit Amt $1,254,009.75 $867,000.00 $610,000.00 $1,922,095.91 $4,291.25 $11,414.99 $118,086.12 $42,397.24 $4,291.25 $11,414.99 $44,053,000.00 $10,000,000.00 $8,105,000.00 $7,743,000.00 $6,270,483.64 $245,213,452.88 $1,426,089.31 $131,881.46 $2,145,000.00 $329,932,908.79 Date: Mon, 7 JAN 2008 12:45:39 +0000 From: "Darlene Wardlaw" <> Subject: Apollo Shoes minutes Attachments: << AudComMins010307.doc>><< AudComMins063007.doc>><< AudComMins010308.doc>> Sorry I haven't made it out to Apollo yet. I did meet with Jeff Chestnutt (Apollo's corporate secretary) who allowed me to copy the minutes of the Board of Directors. The board of directors met twice during the period under audit, January 1 through December 31, and once more last week. I have attached copies. Study these minutes - they provide a history of every important event and transaction that Apollo has undergone during the past year. Make notes in the form below for the audit working papers of matters relevant for the audit of the 2007 financial statements. Prepare a working paper (GA-3) for my review with proper headings and these two columns: Audit Action Recommended You may want to stick a copy of the minutes in the workpapers (GA-3-1, GA-3-2, etc.) behind your memo when you are done with them. DW Date: Mon, 28 JAN 2008 15:37:42 +0000 From: "Darlene Wardlaw" <> Subject: Audit of Accounts Receivable We received a number of account receivable (and one pre-paid insurance) confirmations that I put on your desk when I stopped by to talk to Samuel Carboy this morning. With the good response rate on the positive confirmations, you can probably start working on A/R now. While I think of it, you need to prepare a memo (C-2-1) addressing the following issues: Describe the two forms of accounts receivable confirmation requests that you used and indicate the factors that you considered in determining which type to use. What "alternative procedures" are you going to use to verify the existence of these accounts and the gross value of the receivables if the customers who receive positive confirmations never reply, even to a second request? Put the confirmations in the workpapers (C-2-2, C-2-3, C-2-4, etc.). Address any discrepancies between the client and the customer and propose adjustments as necessary. It would also be helpful to indicate the payments received by Apollo on the Aged Trial Balance Schedule (C-2). You can get these off of any early January deposits slips. If you get copies from the client, be sure to tie the totals into deposits indicated on the cutoff bank statement received directly from the bank. Lastly, the allowance for doubtful accounts looks pretty low. A/R goes up, but the allowance goes down? I need a separate workpaper (C-3) addressing the reasonableness of Apollo's Allowance for Doubtful Accounts. You can specifically identify troubled accounts, look at subsequent cash collections, look at what Apollo's competitors do, look at what Apollo has done in the past (bad debt expense as a % of sales, allowance for doubtful accounts as a % of total receivables) to develop your estimate of what should be in the allowance. Also consider current and previous A/R Turnover and Days' Sales in A/R ratios. Read more: Apollo Shoes Case Assignment Using the Apollo Sh... - JustAnswer http://www.justanswer.com/questions/1ldfz-apollo-shoes-case-assignment-using-the-apollo-shoes-case-materials#ixzz0ueBUioCX