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HI6026 - Audit, Assurance and Compliance | Assignment

12 Pages2880 Words56 Views
   

Holmesglen Institute

   

Audit, Assurance and Compliance (HI6026)

   

Added on  2020-03-04

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The below document discusses the audit plan of Double Ink Printers Limited (DIPL), the analytical method associated with financial information. It also discusses how method of analysing the financial information of the organisations could be carried out through several mechanisms

HI6026 - Audit, Assurance and Compliance | Assignment

   

Holmesglen Institute

   

Audit, Assurance and Compliance (HI6026)

   Added on 2020-03-04

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Running head: AUDIT, ASSURANCE AND COMPLIANCEAudit, Assurance and ComplianceName of the Student:Name of the University:Author’s Note:Course ID:
HI6026 - Audit, Assurance and Compliance | Assignment_1
1AUDIT, ASSURANCE AND COMPLIANCETable of ContentsAnswer to Question 1:.....................................................................................................................2Answer to Question 2:.....................................................................................................................4Answer to Question 3:.....................................................................................................................6Answer to Part A:........................................................................................................................6Answer to Part B:.......................................................................................................................10References:....................................................................................................................................11
HI6026 - Audit, Assurance and Compliance | Assignment_2
2AUDIT, ASSURANCE AND COMPLIANCEAnswer to Question 1:In the method of preparing the audit plan of Double Ink Printers Limited (DIPL), theanalytical method associated with financial information provides immense value. On thecontrary, audit plan delivers the required directions and guidelines to the auditors during theaudit6 operations. Precisely, audit plan enables the auditors in maintaining the cost of audit in aparticular limit for preventing misunderstanding with the audit clients (Alam 2014). Theanalytical approach related to the financial information of DIPL denotes the method of spreadingfinancial information from the various financial declarations of the organisation. The method ofanalysing the financial information of the organisations could be carried out through severalmechanisms. With the help of analytical approach for assessing the financial information, theaccountants and financial analysts of the organisations could utilise such information forundertaking different financial and accounting decisions (Baylis et al. 2017). The common sizeanalytical approach enables in the method of dissecting the financial declaration of theorganisations from the common points of reference. One of the primary benefits is that it helps inextending support in contrasting the financial reports from various financial timelines. The accountants and financial analysts could utilise different lines of items from thefinancial reports and they could verify their base of preparation for the organisations. Forinstance, the registration procedure of different financial and accounting items in the financialreports such as net liabilities, assets, owner’s equity and others could be considered coupled withassessment of digression from the normal scenario (Brawley et al. 2015). Benchmarking is themain analytical process of financial information and this method could be utilised for evaluation
HI6026 - Audit, Assurance and Compliance | Assignment_3
3AUDIT, ASSURANCE AND COMPLIANCEof the audit plan of the organisation. The benchmarking process helps in identifying thevariances in the financial reports of the organisations and the real reasons behind the occurrencesof these variances could be ascertained by identifying the root cause of these variances. Besidesthe process of benchmarking, ratio analysis is adjudged as a major analytical method of financialinformation of the organisations. Ratio analysis is immensely beneficial in contrasting thefinancial statements of two or more organisations for preparing the plan of audit (Chambers andOdar 2015).Explanation:The adopted analytical approaches of the organisations in evaluating the financialinformation has significant effect on the development of the process related to audit planning andthis is crucial to spread financial information amongst the different departments of theorganisations. The following ratios have been considered for this purpose:Particulars201320142015Current ratio1.421.461.50Profit margin0.0680.600.06Solvency ratio0.620.440.21The above table signifies that the current ratio of DIPL has increased from 1.42 in 2013to 1.46 in 2014 and it has increased further to 1.50 in 2015. The profit margin of the organisationhas been fluctuating over the years, which has helped in revealing the amount of net profitgained in contrast to the net sales (Cohen and Simnett 2014). Moreover, this profitability analysisgives the financial analysts and accountants with the view to determine the expenditures of theorganisation. Besides, it enables the financial analysts and accountants to gain an overview of the
HI6026 - Audit, Assurance and Compliance | Assignment_4

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