Acct1059 Letter to Sheridan AV 2022

Running head: ACCT1059
Acct1059
Name of the Student:
Name of the University:
Author Note

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ACCT1059
Table of Contents
Letter to Sheridan AV................................................................................................................2
Internal Memorandum................................................................................................................3
Analysis of Financial Position of Sheridan AV.........................................................................4
Internal Control Techniques.......................................................................................................6
Control Deficiencies and strategies to be implemented.............................................................8
Reference..................................................................................................................................10

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ACCT1059
Letter to Sheridan AV
TO: Sheridan AV
FROM: Senior Auditor at Alex Gold
Dear Sir,
This letter is to intimate Sheridan AV that the audit team of Alex Gold that is leaded by
Graeme Moore will be conducting an audit of Sheridan AV’s financial statements for the year
2021. The team will analyze the financial position of Sheridan Av to find areas where the
audit team needs to focus more to find for material misstatement. The business risks that
Sheridan AV has faced during the period will be analyzed. Sheridan AV started business
since the year 1971. John Sheridan was the founder of the company (Reddy, Rekha and
Scholar 2018). Sheridan AV is known for their innovation in the design of the speakers and
the acoustics. Sheridan AV had created the Epsilon variable Coil Drive system which was
one of the most amazing speakers that was sold throughout the globe. The speakers were able
to produce crystal clear sounds and the reproduction of the sound was very realistic. The new
managing director David Sheridan was appointed in the year1994. David Sheridan had
combined the best sound technology with the best visual technology provided by the
company to create a home cinema system to be sold in the market. Sheridan AV has the
mission to sell the best quality sound and visual technologies in the market (Kolhar, Abu-
Alhaj and El-atty 2017). Sheridan AV has the aim to make the audio and the visual
technologies with the sources from the manufacturers that have high quality production. Each
product of Sheridan AV is tested by the engineers who are extremely qualified before they
are launched to the public. Sheridan AV sells its products on wholesale to the resellers who
distribute the products of the company throughout the country. The Audit team of Alex Gold
will have the opportunity to audit the financial statement Sheridan AV.

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ACCT1059
Thanking You,
Yours Sincerely,
Senior Auditor
Internal Memorandum
TO: Graeme Moore
FROM: Senior Auditor at Alex Gold
This letter is to intimate that the audit team at Alex Gold is going to audit Sheridan AV. The
audit team will analyze the risks that are involved in each of the accounts that are there in
each of the financial statements that have been provided by Sheridan AV. Sheridan AV has a
wholesale distribution that sells its products throughout the country and also to the resellers
who in turn sell the products throughout the globe (Gepp et al. 2018). For such a large
company that sells such large batches of various products throughout the globe material
misstatement can be an issue. The audit team at Alex gold will analyze the various tangible as
well as the intangible assets that are used by Sheridan AV (Ma 2020). The team will examine
the new accounting standards that have been implemented recently that could increase the
business the business risk in the company which could lead to an increase in the risk of
material misstatement. There is high competition in the audio and the visual industry recently
which will also be considered assessing the risk of material misstatement. Since Sheridan AV
has been headed by David Sheridan the company has faced heavy changes mainly relating to
technology. The audit team will also examine whether Sheridan AV is having problems
relating to the generation of enough cash flow this could also increase the risk of material
misstatement. The audit team will also analyze whether Sheridan AV has any unusual
increase in the profitability of the company with respect to the other companies that are in the
same industry. The audit team will also analyze whether Sheridan AV an unexpected amount