Dog Food Inc Project Case Week 7

Peyton Approved is a business that manufactures and distributes organic all-natural and hypo-allergenic baked treats for dogs. The company named after our dog (Peyton), was an idea that started at home after realizing the severity of his allergies from the products bought at the store; and what could be done to make all natural products that would not cause any more harm. What started as a home-based idea soon turned into a business after realizing that “Peyton” was not the

Breeder’s Own Pet Foods, Inc is a major producer of dog food for show-dog kennels in the United States. Their executives viewed the retail dog food market as a growth opportunity and would like to begin by introducing their product; Breeder’s Mix dog food into the Boston area in 2011. Breeder’s Mix dog food is a nutritionally balanced, frozen dog food that is among the costliest to produce. Their product has no additives or preservatives and is made up of 85% fresh meat and 15% of the highest quality fortified cereal. It is the finest quality and has been used and recommended by professional show-dog owners for years. Breeder’s Mix has a long

Representatives have approached breeder’s Own Pet Foods, Inc. from Marketing Momentum Unlimited, a marketing and advertising consulting firm. The reason for the meeting was to discuss the company’s possible entry into the retail branded dog food market in the Boston market.

The company needs to evaluate who comprises its target market. Is the market the entire dog food market? The 10 percent that is currently purchasing frozen food or the 15% that would purchase if it were more convenient to do so? Currently consumers do not associate dog food with frozen food; but even if they did, the product may still not appeal to the average consumer due to time requirements for its preparation and thawing.

The Conscionables and Organic customers are the consumers who will purchase BOPF’s brand of dog food. A health food market such as a Whole Foods offers a variety of food options for their shopper’s pets that may have different feeding philosophies with dietary needs, preferences and food sensitivities in mind. These combined, would make a health food market launch an ideal stepping stone for BOPF to begin an initial

There are three main categories of dog food: dry, canned and treats. In 2011 the sales of dog food totaled somewhere in the arena of 14 billion dollars. Endeavoring to bring new dog food to an already established market can be a “daunting” task, especially when that particular dog food is frozen. Breeder’s Own Pet Foods as a whole has realized how diverse the dog food market is; however, brokers within this conglomerate believe that the true organic potential of this marketplace has yet to be “tapped” into effectively. With an ever-changing push toward becoming

Most dog owners would be horrified to know what is in most commercial dog foods. The tainted dog food scare of 2007 sent worried dog food owners to the internet to learn about alternatives to grocery and pet store dog foods.Not knowing which dog food manufacturer to trust, many people turned to making their dogs food themselves. This is a reasonable phenomenon since more and more people are becoming conscious of their personal diet, they include their dogs diet to their concerns.One popular alternative for your dog is the raw foods diet, commonly known as the BARF diet (Biologically Appropriate Raw Food).

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Over the past few weeks our team has looked into a number of aspects of Kudler Fine Foods and made recommendations as necessary in hopes of updating and replacing existing components of the companies IT systems in hopes of making the company more productive and profitable. Last week out team focused on the importance of audits and at a number of different types of audits that should be conducted to future evaluate the company as a whole. From our research we found that the most appropriate audits to employ are the SAS 94 and the Attestation audits (in particular, the data analytic review) (Cornwall, Sullivan, & Chandler, 2012). These types of audit systems

Professional scepticism is an attitude which is adopted by an auditor to conduct the audit. The auditor needs to maintain a questioning mind and seek independent evidence to corroborate information provided by client. In the aspect of professional judgement, an auditor uses the level of expertise, knowledge and training to conduct an audit. The auditor should judge the information source’s reliability and the evidence’s sufficiency. Due care means that auditor needs to apply standards and document each stage of the audit process when conducting an audit. In the case of Kleenmaid, the auditor needs to adopt an attitude of professional scepticism to recognize the possibility that a material misstatement could exist because of fraud. They must remain independent of their client and search for evidence thoroughly to validate information provided by Kleenmaid’s board of directors. Furthermore, the auditor has the responsibility to assess the risk of fraud by considering the incentives and pressures, and opportunities to perpetrate a fraud, and attitudes and rationalisation to justify a fraud. In the case, Kleenmaid had debts of nearly $100 million in 2009, which is the significant incentive or pressure considered by the auditor to commit a fraud. In addition, Kleenmaid operated as an importer and distributor of whitegoods, with 22 outlets, 15 franchises, and 22 staffs. This means the company will have a high volume of

Payton Approved is a self-made company that was created when a need in the baking field was discovered. The owner’s dog couldn’t tolerate store bought treats due to allergies, and so they started baking and successfully selling hypoallergenic dog treats from their home. Just as allergies with humans consists of a large demographic, it dogs in the canine world as well. With the assistance of the TD Bank, the owner of Peyton Approved would like to take it a step further and open up a corporate form of business selling all natural and hypoallergenic dog treats from its own bakery. This memo will be explaining the business transactions for Peyton Approved over a three-month period.

The information that an auditor gathers as he runs analytical procedures in an entity he is auditing and as he gets better acquainted with the organization must be enough in determining materiality and assessing risks. Materiality is very important especially in helping the auditor determine what kind of audit report to be given. The auditor has to make reference to two key issues as regards what areas the financial audit covered. This helps in highlighting risk and materiality. These issues are: the limitation of the liability of the auditor to the significant information given to him and established by him by way of the materiality parameters he has established given his professional capacity and reasoning and his supplying

Due to aforementioned risk, the auditors vouch to provide reasonable, however, not an absolute level of assurance. As we see in this case, the auditors of Ernst & Whinney did perform most of the steps to collect sufficient level of evidence: reviewed available documentations, performed analytical procedures, obtained third-party confirmations and visited restoration sites. However, the auditors must use a combination of analytical skills and appropriate level of professional skepticism to determine whether given information is accurate, relevant and reliable, by verifying third-party assertions and performing an internal control. Therefore, Ernst & Whinney auditors failed to meet “particularly crucial” principal of management assertions - the occurrence, and failed to support the reliability and relevance of events and transactions.

facilitate the identification of risks and the assessment of their effect on the financial statements, risks are categorised as: financial risks – such as cash flow risks compliance risks – such as breaching of laws and regulations risk operational risks – such as loss of key employee risk and loss of data risk. Specific use of the business risk approach to an audit will be covered in the second article of this series. The ultimate objective of adopting the business risk approach is to reduce audit risk – the risk that the auditor will give an inappropriate opinion on the financial statements. Students should therefore appreciate how business risk is linked to audit risk and how the business risk approach is integral to the use of the audit risk model when planning audit work. FINANCIAL STATEMENT/DETECTION RISK Students should be aware that audit risk is a function of financial statement risk (the risk that the financial statements are materially misstated), and detection risk (the risk that the auditor will not detect such misstatements). Financial statement risk This has two components – inherent risk and control risk. Inherent risk is the susceptibility of an assertion to a misstatement which could be material (individually or when aggregated with other misstatements), assuming that there were no related internal controls. It is limited either to the nature of the item in the

A risk-based audit methodology is designed to be used throughout the audit to efficiently and effectively focus the nature, timing and extent of audit procedures to those areas that have the most potential for causing material misstatements in the financial report. ASA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and its Environment and ASA 330 The Auditor’s Responses to Assessed Risks are auditing standards that specifically set out the riskbased audit approach, with other auditing standards containing specific risk-related principles and procedures appropriate to