You Decide Smackey Dog Food Inc.

In: Business and Management

Submitted By lhopkins2013
Words 1936
Pages 8
SMACKEY DOG FOODS, INC.

Smackey Dog Foods, Inc., is a privately owned dog food manufacturing company, which was started by three sisters, Sarah, Kim, and Jillian, in the kitchen of their suburban Chicago home. They started by manufacturing a natural dog food with ingredients they bought from a local grocery store. These products were discovered by local pet stores and small grocery stores which also became distributors of their products. A larger facility was then needed as the demand steadily increased for their products. With this expansion the sisters were required to hire more workers and manage a growing company. Compared to their competitors’, Smackey Dog Foods, Inc. sales were on an upward growth trend. With increasing sales from the prior year, the sisters opened a boutique division and called it Best Boy Gourmet. Sarah, the president and general manager, has met with a banker to request a loan for $150,000 to expand the facilities and equipment. Their first loan for $150,000 was used to purchase industrial size food production equipment, which was also used as security for the loan. With this new request for a loan from the bank, they are now requiring an audit of the corporate financial statements of Smackey Dog Foods, Inc. before they will approve the new loan. My firm, Keller CPAs, has been hired to conduct an audit of Smackey’s financial statements and form an opinion about their financial statements, which will be used by the bank to help secure the loan.

The Securities and Exchange Commission (SEC) has a significant influence on this particular audit. This significant influence can be observed within the auditing standards that have been followed by Keller CPAs in this audit. The six ethical principles of the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct will be observed during this…...

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