HI6026 | Audit, Assurance & Compliance Assignment

Running head: AUDIT ASSURANCE AND COMPLIANCE
Audit Assurance and Compliance
Name of Student:
Name of University:
Author’s Note:

1AUDIT ASSURANCE AND COMPLIANCE
Answer to Question 1:
Application of analytical procedures to the financial report information of DIPL
The information provided in the financial report of DIPL is based on development of the
audit plan. The audit plan has been further seen to be considered as per the particular guideline
followed during the undertaking of the audit process. In general, this particular this has helped
the assessor in considering the audit cost at a reasonable level and assists in the aversion in the
misunderstanding along with clientele. The analytical approach to the financial considerations of
DIPL has been referred by dissemination of the information in the financial declarations of the
company. The main process of the evaluation analytical approach has been considered based on
the specific approach of the financial declarations, accountants and the financial analysts which
has been seen to be vital in making business decisions.
The analytical approach has been further based on the common sizing with the analysis of
the reference point. This has been conducive in the comparison of the financial statements as per
different period in different corporations. The ratio analysis has been based on the comparison of
the financial declarations in the planning of the audit (Mahmoud HOSSEINNIAKANI, Inácio
and Mota 2014).
Explanation of the way the results influence planning decisions for the audit
The planning decision results has been considered for the audit planning and is necessary
for the various types of the results of the analytical approach taken into consideration for the
disseminating information based on financial statements. The different outcomes of the ratio has
been evaluated as per current ratio of the firms for DIPL. This has been computed as 1.42 in

2AUDIT ASSURANCE AND COMPLIANCE
2013, 1.46 in 2014 and 1.5 in 2015. The profitability aspect of the ratio of calculated as per 0.068
in 2013, 0.60 in 2014 and 0.06 in 2015. The profitability ratio based on the profit margin has
been further able to reveal the position of the net income earned by the firm in compared to the
net sales from DIPL. Despite of this, the assessor needs to understand whether the expenses are
low or high and the management is having the requirement to curtail the budget and time. The
favourable and the unfavourable changes in the ratio can be factor has been further based on the
factor as per the audit assessment and soundness in the financial position. Similarly in 2015 and
2013 the solvency ratio has been identified to be 0.62 and 0.21 (Yasin and Nelson 2013).
Answer to Question 2:
Identification of inherent risk factors that arise from nature of business operations of DIPL
The several types of the important factors in the auditing have shown several incidences
of material misstatements in the financial announcements of a particular concern. The systematic
and the unsystematic risks have been considered from the financial misstatements and the
financial declarations of the corporation. The various types of the risks detected has been
considered based on the both financial as well as non-financial factors. Nevertheless, an
evaluator might consider it as demanding to detect certain risks. The risks identified may be
linked to the various types of the other risks correlated to omission and diverse errors and the
diversified nature of the errors in business operations of DIPL (Sultana et al. 2015).
Based on the given scenario, the numerous transactions are particularly omitted by the
accountants otherwise the management of the DIPL Corporation. This can sequentially be
directed for the various types of the inconsistency particularly with the essential planning along
with the sales activities. Furthermore, the evaluations based on the financial declarations which