Essay --

Q 1 Discuss how the SEC has influence (if either) everywhere the take stock of Smackey Dog solid food, IncSolutionSEC has a significant influence on the audit of Smackey Dog Food, Inc because it sets certain auditing standards that need to be adhered to while conducting and audit of any organization. One of the standards is ensuring a professional freedom of auditors as they carry out their audit. Keller CPA would be more objective in their opinion by maintaining independence in all maters and be free from conflict of interest in performing their professional engagement. Thus, although SEC does not possess direct control over privately held companies like Smackey, it, however, sets up generally accounting principles and disclosure requirements for all auditors to follow in order to prevent fraud and misstatement and to ensure fairness to users of audited monetary statements for investment purposes or decision making. Therefore, Keller CPA would be required to follow the six gene rally accepted auditing standards established by ASB of the AICPA with regards to field work and insurance coverage which were established through the influence of SEC.(Arens, Alvin A., Elder, Randall J., and Beasley 2012 p. 31)Q2 Discuss the essential activities involved in the initial planning of an audit. How do these all specifically relate to Smackey Dog Food client?Solution Keller CPA would first understand the clients industry operations and in particular how the clients trading functions. This understanding will set the stage for assessing clients business risk, risk of significant and material misstatement of the clients financial positions and the overall audit risk.The four major part of audit planning are(i) arrest internal control operatio... ...ble to third parties. Liability under SEC can also arise as well as violation of SAS 99 by not exercising professional skepticism.(Arens, Alvin A., Elder, Randall J., and Beasley. 2012. P. 115-116) REFERENCIESArens, Alvin A., Elder, Randall J., and Beasley, Mark S. (2012). Auditing and Assurance Services An integrated Approach. 14th ed. Upper Saddle River Pearson HallPCAOB (Public Company Oversight Board), Auditing Standard proceeds 9, audit planning, retrieved 1/22/14 http//pcaobus.org/Standards/Auditing/Pages/Auditing_Standard_9.aspxAICPA (American Institute of CPAs) Section 50, Principles of Professional Conduct, retrieved 1/17/14 http//www.aicpa.org/Research/Standards/CodeofConduct/Pages/et_52.aspx