Assignment 1

Topics: Auditing, Audit, Auditor's report Pages: 7 (1477 words) Published: January 28, 2015
Auditing I | ACG 4632.591S15

Assignment 1
Landon Graber
Maya Pham
Melanie Pratt
Robin Michael Schneider

LILTS BERGER & ASSOCIATES

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Certified Public Accountants

CW 11/23/2015

Ocean City, Florida 33140

October 30, 2015

Mr. Donald Phillips, President
36 Clearwater Lake Road
Ocean City, Florida 33140

Dear Mr. Phillips:

This letter is to confirm our understanding of the terms of our engagement as the auditors of Ocean view Marine Company for the year ended December 31, 2015.
Services and Related Report
As you have requested, we will audit the financial statements of Oceanview Marine Company, which comprise the balance sheet for December 31, 2015, and the related statements of income, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes to the financial statements. These reviews will be conducted in accordance with Generally Accepted Accounting Principles (GAAP) in the United States of America. We will communicate to you any matters that we believe may require material modifications to make it conform with GAAP.

Our audit will be conducted with the objective of our expressing an opinion on the financial statements. We will issue a written report upon completion of our audit of Oceanview Marine Company’s financial statements. Our report will be addressed to the board of directors of Oceanview Marine Company. We cannot provide assurance than an unqualified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion, add an emphasis-of-matter or other-matter paragraph. We may reserve the right to decline is issue a report due to any reason caused by your party. Should such situation arise, we will notify you in writings.

Our Resposibilities and Limitations
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. An audit also includes evaluating the appropriateness of accounting policies used and the

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CW 11/23/2015
MPh 2/19/2016
reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. You should recognize that there are limitations in the auditing process. To your understandings, audits are conducted in forms of selective testing of data reported on the financial statements. Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements may not be detected exists, even though the audit is properly planned and performed in accordance with GAAP.

In making our risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. However, we will communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit. Management’s Responsibilities

Our audit will be conducted on the basis that the management of Oceanview Marine Company acknowledge and understand that they have responsibility: a. for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America;

b. for the design, implementation and maintenance of internal control relevant to the fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error;

c. to timely provide us with...
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