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Audit, Assurance and Compliance || Assignment

   

Added on  2020-03-02

12 Pages3036 Words29 Views
Audit, Assurance and Compliance
Audit, Assurance and Compliance || Assignment_1
Table of ContentsIntroduction:....................................................................................................................................3Extraction of crucial financial information-Ratio Analysis.............................................................3Impact of crucial financial information over financial planning:....................................................5Inherent risk factors associated with the business operation of DIPL:............................................6Identification of the two key fraud risk factors:..............................................................................8Impact of the risk factor over Audit:.............................................................................................10Conclusion:....................................................................................................................................10Reference:......................................................................................................................................11
Audit, Assurance and Compliance || Assignment_2
Introduction:This assignment represents how an auditor digs in to the financial statements of the company toextract crucial information regarding the operational efficiency of the company and also thepossible anomalies that are taking place in to the activities of the company(Christensen etal.,2012). In this assignment an audit report has been prepared to identify the accountingaccuracy with respect to the major items of the financial statements in order understand thefinancial health of the company and also to identify the areas where possible fraud can happen.Extraction of crucial financial information-Ratio AnalysisDIPL-Ratio analysisyear201320142015PrintingIndustry bench mark ratios(Gleeson,2017)CommentsItemsCurrent Assets538593875091509600929Current Liability378000051202506397500Gross Profit600450060795006604500Net sales342120003769950043459500Income from operating activities 678000072300008308088Net income before interest and tax 345465033570373867337Net Assets 91500001078365012250491Debt7500000Equity91500001078365012250491Interest expense 8437983663808038
Audit, Assurance and Compliance || Assignment_3
Ratiosliquidity ratiocurrent ratio[current asset /current liability]1.4248511.4665591.5007311.53-1On an average the DIPL has 1.4 units of current assets for paying 1 unit ofcurrent liability, but the industry standard requires that a business in printing industry should have 1.53 units of current assets for each units of current liability(Higgins, 2012)Profitability ratioGross Profit Margin[gross profit/net sales]18%16%15%Gross profit earned out ofevery dollar of revenue is declining over timeOperating Profit Margin[operating profit/net sales]20%19%19%15.63%Though the operating profit earning out of every dollar declining over time, but still it is above the industry standardReturn on Asset[Net income /total asset]38%31%32%percentage of income generated out of total asset declining over timeCapital structure ratioDebt/Equity000.612222.4-1There was no presence of the interest bearing liabilities in 2013,2014,In 2015 some amount of interest bearing liabilities has been generatedDebt /Asset ratio000.61222The interest bearing liabilities are not recognized as debt ,Therefore DIPL appears as a company that only runs on equity capitalDebt servicing ratiosInterest coverage ratio[EBIT/Interest expenses]40.9420640.125714.786083ratio declined drastically in 2015,implies sudden huge increase in the debt burden of the company
Audit, Assurance and Compliance || Assignment_4

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