Question

Background Information:

In this project you are to assume that you are the audit partner on the audit engagement of Earthwear Clothiers, Inc. (Earthwear). Earthwear is a U.S. publicly traded company and is subject to the rules and regulations of the Public Company Accounting Oversight Board (United States). It is classified as an “accelerated filer” under the rules of the Securities and Exchange Commission (SEC).

Your firm has been engaged to perform an audit of the financial statements of Earthwear's calendar year ended December 31, 2017. Your audit will include:

-Issuance of an Engagement Letter

-Timely quarterly reviews

-An audit of Earthwear’s internal control over financial reporting

-An audit of Earthwear’s Financial Statements for the year then ended

-Issuance of a Management Letter concerning findings and recommendations

Earthwear has an audit committee of the board of directors charged with oversight of financial reporting and disclosure. While you are conducting your audit of Earthwear, you and your audit team are expected to meet with the audit committee on several occasions.

Required Task:

Prepare a calendar of your proposed meetings with the audit committee on a month by month basis. For each meeting you should identify the information (matters) that you should communicate to the audit committee.

Answer 1

We can schedule monthly meetings with the client and a sample Agenda for the first meeting is hereunder:

Introduction of the team

Scope of the audit

1) Filing date for 10K (Annual Filing) -  (Assuming Earthwater is Large Accelerated Issuer (Public Float>$700MM) - within 60 days from the year end. Hence the team targets to issue audit report on or before 26th Feb 2018, to avoid last minute suprises.

2) Filing date for 10Q (Quarterly filing) - (Assuming Earthwater is Large Accelerated Issuer (Public Float>$700MM) - within 40 days from the quarter end. Hence the team will target to issue interim reviews within 35 days from the close of quarter.

3) We would be issuing an Integrated/ICFR opinion (Internal control over Financial Reporting)

Milestones

4) The team will follow the following deadlines for major milestones:

a) Planning: July to August.

b) Walkthroughs of Controls and test of controls: September

c) Interim: October- November

d) Year End: Jan to Feb

Effect of accounting pronouncement

5) Discussion on effect of new accounting prouncements like Revenue Recognition and changes in any accounting priniciple over the last year.

Changes in Entity's environment

6) Discussion on changes in the leadership

7) Any change in the control environment over the previous years. Any issues identifed over the years and actions taken by the committee.

Communication

8) The audit team will be communicating the issues identified in monthly meetings and if they are uncorrceted till the year end, these will form part of the management representation letter.

Logistical

9) Our team will reach out to you for various supports required during the entire audit. Request your cooperation.