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Audit AUDIT AUDIT 7 Audit Author's Note

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Holmes Colleges

   

Audit, Assurance and Compliance (HI6026)

   

Added on  2020-02-24

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The above document addresses some auditing, assurance, and compliance concerns. Describe the analytical procedures used to analyze the financial report data from DIPL. Determine two inherent risk concerns that stem from DIPL's business operations, as well as the probability of fraud.

Audit AUDIT AUDIT 7 Audit Author's Note

   

Holmes Colleges

   

Audit, Assurance and Compliance (HI6026)

   Added on 2020-02-24

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Running head: AUDIT AuditName of the Student: Name of the University: Author’s Note:
Audit AUDIT AUDIT 7 Audit Author's Note_1
1AUDITTable of ContentsAnswer to Question No 1...........................................................................................................2Answer to Question No 2...........................................................................................................4Answer to Question No 3...........................................................................................................7Part A.....................................................................................................................................7Part B....................................................................................................................................10Reference List..........................................................................................................................11
Audit AUDIT AUDIT 7 Audit Author's Note_2
2AUDITAnswer to Question No 1The analytical process that persists with the financial data of Double Ink PrintersLimited (DIPL) has been an influential factor for the construction of their audit plan. Theconstructed plan could be regarded as a parameter that would become a key to be followedduring the preparation of the audit. These parameters have been helpful to the auditor in orderto keep track of the entire cost that would be required during the computation of the audit atan efficient degree and this would aid in lowering the gap of understanding with thecustomers. The analytical method for the financial declarations of DIPL specifies the processof dissemination of the data (Audit & Australia 2015). These processes of assessment can beundertaken making use of a variety of techniques. On the other hand, by taking assistanceanalytical method of examining the financial declarations, various financial experts and theaccountants as well could interpret the data for attaining the decisions that would bebeneficial for the business. The generalising of the analytical process assists in examining the financialdisclosures at a general reference point. As an outcome, the financial records can bedifferentiated with reference to the numerous entities or with the time schedule. The auditorstry to think of several items that have been disclosed in the financial statement with respect tothe financial reporting technique (Sarens et al., 2013). An example can be drawn that like theregistration of the items that are inclusive of liabilities, assets and the equity stakeholders inthe reporting of the financial statements of DIPL along with investigating deviations from thepractical situation. It has been observed that benchmarking has been regarded as a process ofevaluation and this process can be used in a precise manner for the scrutiny and theevaluation of the audit plan (Stevens 2014). The differentiation in the real financialannouncement from the benchmark aids in discovering the variances and is aids in assessingthe discovery of the factors of the recognised variances. Furthermore, the ratio analysis could
Audit AUDIT AUDIT 7 Audit Author's Note_3
3AUDITbe attuned as an effectual technique of evaluation that can be exploited for the explanation ofthe financial declarations that is attached with the evaluation of the audit plan. Explanation to the Case Study The end result of the decision planning related with the planning of the audit ispersuaded mostly through the results of the analytical process in order to publicize the datafrom the financial statements. The tables given below provide the financial ratios that havebeen constructed with respect to the case study. Particulars201320142015Solvency ratio0.620.440.21Profit margin0.0680.600.06Current ratio1.421.461.50The table that has been computed above has revealed that the current ratio of DIPLhas grown over the last three years. Furthermore, the margin profit has been noticed to bechanging for the last few years. By taking assistance of the ratios computed above, the netprofit margin of DIPL can be contrasted with the total profit that has been created (Wang etal., 2015). Conversely, this could be of significant value to the auditor in gaining anindication of whether the expenses are higher or are lower and if the administration of DIPLhas the requirement to decrease the budget and the total expenditure of the same. Thealterations in the ratio whether positive or adverse can be exploited as a preferential reasonfor examining the authenticity and the preciseness of the financial situation of DIPL. Forinstance, the solvency ratio that has been constructed in the table above assists inunderstanding the positive and the adverse patterns in the entire financial condition of DIPL(Brown et al., 2015). In a comparable manner, the comparison of the ratios for the last threeyears would be helpful in giving out the knowledge of eliminating the long and short termcompulsions of the organization. Therefore, the auditors can get effective knowledge of the
Audit AUDIT AUDIT 7 Audit Author's Note_4

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