LCC has conducted an audit of Apollo Shoes, Inc. balance sheets, the retained earnings, cash flows, and other related statements of income for the year ended December 31, 2006/2007. Apollo Shoes Inc management is responsible for maintaining the effective internal controls that goes along with the financial statements and how well the accuracy is going to be. LLC has evaluated the effectiveness of the said controls and with everything to see the relevance in the timing, the substantive in quality, and the comprehensive in nature.
The responsibility of our firm is to express an opinion that is supported by audit evidence in regards to the accuracy of the Apollo Shoes, Inc. financial statements. Our firm has conducted all audit related services that is accepted by the United States and the generally accepted auditing standards. The planning and performance done ensures that the audit was done to execute and obtain reasonable assurance that the financial statements published by Apollo Shoes, Inc. are free and clear of material misstatement.
It is going to include the examination of the evidence and/or the supporting documentation for the amounts that are disclosed and included in the financial statements. The assessment of the accounting principles that were used, how the management did their estimates and the overall evaluation of the presentation of the financial statements (Arens, Elder, & Beasley, 2006). Therefore, we assert that this audit provides a reasonable basis for our rendered opinions with the information that was provided by Apollo Shoes, Inc.
The consolidated financial statement referred to above have been presented fairly, in our opinion, based on the LLC audit services and those of the prior auditor. While accompanied by an explanatory paragraph below, the results of Apollo Shoes, Inc. financial position of the company as of December 31, 2006/2007 the cash flows and the operations for the year are in conformity with the generally accepted accounting principles. The financial statements of Apollo Shoes, Inc have been prepared assuming that they will remain in a going concern.
The purpose of the LCC audit was not to evaluate the health of the company; SAS 59 indicated that the auditor has the responsibility to evaluate the company and to see whether the company is likely to remain a going concern (Arens, Elder, & Beasley, 2006). LLC have expressed some uncertainty over Apollo Shoes, Inc. status as a going concern for a couple of factors. They are related to a loss of major customers that are pending legal proceedings, which could jeopardize the organization and its ability to operate.
Mall Warts, the largest customer for Apollo Shoes, Inc. has declared bankruptcy, which has prompted a reduction in the clients operating activity, workforce and now an ongoing labor strike. It is a class action lawsuit for $12,000,000 for a gross negligence and violation of warranty on the merchantability that was filed in early 2008. With the legal fees that had incurred in 2007, the financial statements do not include any adjustments that may result from the outcomes of the uncertainties that are there.