RUNNING HEAD: Audit Report and Internal Control Evaluation
Audit Report and Internal Control Evaluation
Oct 23, 2010
University Of Phoenix
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of APOLLO SHOES, INC.
We have audited the accompanying balance sheets of APOLLO SHOES, INC. as of December 31, 2006 and 2005and the related statements of income, comprehensive income, shareholders’ equity, and cash flows for the two years in the period ended December 31, 2006. We have also audited management’s assessment, included in the accompanying Management’s Report on Internal Control over Financial Reporting, ...view middle of the document...
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. We did not audit the financial statements for the year ended December 31, 2006. These financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the prior period presented is based solely on the report of other auditors.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods...