Auditing in the Digital Age

This assignment delves into the contemporary challenges and advancements shaping the field of auditing. It examines topics such as continuous auditing, the integration of data analytics in audit procedures, ensuring data integrity within cloud computing environments, and the impact of emerging technologies on auditing practices. The provided research articles serve as a foundation for understanding these critical trends and their implications for auditors.

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

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Table of Contents
Answer to Question 1:.....................................................................................................................2
Answer to Question 2:.....................................................................................................................3
Answer to Question 3:.....................................................................................................................5
Reference.........................................................................................................................................9

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Answer to Question 1:
Application of analytical procedures to the financial report information of DIPL
The report has emphasized on the different aspects of DIPL which has stated on the
development of the audit plan. The main implications of the audit plan have been further seen to
be based on the guidelines which have been related to undertaking of the overall audit process. In
general the assessor has considered the reasonable aversions which have been related to the
clientele misunderstanding. The different types of analytical approach have shown the
dissemination of the information as per the financial declarations of the company. The important
evaluation has been based on the approach such as financial analysts, financial declarations and
accountants which are seen to be important for making business decisions (Messier 2014).
The important form of the analytical approach has been further seen to be based on the
common sizing of the analysis with the reference point. This is seen to conducive for the
comparison.
Explanation of the way the results influence planning decisions for the audit
The planning decision has been further seen to be assumed as per the results of the
analytical approach which has been able to state the various approach of the dissemination of the
financial statements on the financial statements. For example, the different types of the outcomes
of the ratio have been further based on the different types of the analysis based on the various
considerations taken from 2013. Based on the consideration of the current analysis it has been
seen that current ratio of DIPL is 1.42 in 2013, 1.46 in 2014 and 1.5 in 2015. The profitability of
the ratio has been computed as per 0.68 in 2013, 0.60 in 2014 and 0.06 in 2015. The profit

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margin and the profitability ratio of the firm have been further seen to be considered to be 0.62
and 0.21 (Yang and Jia 2013).
Particulars 2013 2014 2015
Current ratio 1.42 1.46 1.50
Profit margin 0.068 0.60 0.06
Solvency ratio 0.62 0.44 0.21
Table 1: Ratio Analysis
(Source: as created by Author)
Answer to Question 2:
Identification of inherent risk factors that arise from nature of business operations of DIPL
The different aspects of auditing have been able to show several incidences of material
misstatements as per the various types of the announcement in a particular company. The
different types of systematic and the unsystematic risks have been associated to the financial
declarations and financial misstatements of the corporation. The varied nature of the risks has
been further seen to be based on the non-financial as well as the financial perspectives.
Nevertheless, the evaluator needs to consider the demands with certain risks. These risks has
been further seen to be linked with the risks correlated to the diversified errors in the DIPL
business operations (Semer 2013).

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As per the given scenario, the transactions are seen to be based on the omissions made by
the accountants in the DIPL corporations. The sequential segregation of the information can be
further be disseminated as per the various types of the consideration which has been seen to be
associated to the essential planning of the sales. In addition to this, the financial declarations are
considered as per the accomplishments of the profit incurred from the revenue and sales. The
analysis of the present study has been further able to reveal that the IT implementation has been
able to generate particular issues. DIPL Corporation has been seen to have adequate staff to
handle the execution and the installation to carry the testing of the new arrangement by the end
of the financial year (Broberg, Umans and Gerlofstig 2013).
The various aspect of the DIPL has been further able to record the cash receipts
considered by the finance professionals and the various concerns which have not been properly
looked after. The staff member has been able to follow an appropriate order for the registration
of sequence of account receivables (Garg and Bawa 2016).
Risk and way it might affect the risk of material misstatement in the financial report
The various types of the inherent nature of the risks have been seen to be considered
based on the following factors for the susceptibility towards financial misstatements.
Excessive pressure on employees and management- These considerations has been identified
with the lack of proper bookkeeping method. The particular attributes has been related to
encountering of various types of the cash flow issues such as poor operating outcomes and poor
liquidity (Earley 2015).

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Risks of errors or else incorrect misrepresentation- The various types o the identified risks
has been further related to the complexity and errors related to the misrepresentation of the
statements.
Integrity of the entire management- The management of DIPL has been seen to lack the
various aspects of the expectation to prepare for the reputational loss in the given concern and
business community.
Unusual pressure on management- During the availability of the incentives schemes, the
management has been also seen to present an unfavourable decision.
Nature of entity business- The various nature of growth aspect of DIPL has been seen to lead to
the growth in the major economic competitive circumstances. The various types of the
mentioned facts has been seen to be considered as per the different types of the inherent risks
associated to the business entity and the required for the structure of audit planning (Kober, Lee
and Ng 2013).
Answer to Question 3:
A) Identification and explanation of two key fraud risk factors relating to
misstatements arising from fraudulent financial reporting
Asset Loss The associated risk of the asset loss has been able to consider the various
amounts of losses which have been seen to be associated to the fraud of

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the asset. The dissatisfaction of the workforce has been further seen to be
considering the various involvements of the fraud activities. The
expectation based on the investors has been further able to define the
different types of the consideration which has been seen to be based on
the management to consider the performance based declarations on the
specific financial outcomes in terms of averting the generated guarantees
(Shin, Lee and Park 2013).
Fraud incidence for
workforce
engagement
Some of the various types of the other considerations of the fraud risk
have been further seen to be based on the operations of DIPL. The main
operations of the company have been considered as per the adoption of
novel accounting system. The excessive pressure of the employees has
considered the carrying process of the new IT systems which has been
considered for fraud identification. The aforementioned implementation
has been further able to reveal that employees may be engaged to the
different types of the fraud activities and able to consider the material
misstatements. The study has further accounted for the improper handling
of the process for the implementation of the IT and inappropriate
allocation of the transactions at the end of the each FY. The
aforementioned concern has further led to the losses associated to the risk
in the fraud and material misstatements (Jans, Alles and Vasarhelyi
2013).
Financial reporting
fraud
The different types of the other considerations made in the financial
reporting have been considered based on other components. The

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excessive amount of the compulsions has been able to highlight on the
announcements on financial management to adhere to meet certain goals
which are related to qualify for the debt acquisition. The increased nature
of the risk has been further seen to be based on the improper financial
announcements. Based on the given considerations financial position of
DIPL has been able to infer that the increasing revenue from 2013 to
2015. In addition to this, the total assets and the current assets have been
further considered to be increasing in nature. Furthermore, the total assets
and the current assets of DIPL corporation have been able to state on the
increasing nature. The gross profit of the corporation has also increased
from 2013 to 2015. The prominent matter of this has been seen with the
loan amounting to 7.5 million and in maintaining the current ratio of 1.5
and debt equity ratio has been also discerned to be lower than 1. This
particular requirement has been further seen to be considered as per the
improper reflection of the financial position. Hence DIPL has failed to
maintain the definite benchmark, thereby making it non-eligible for the
finance of the BDO finance (Chiu, Liu and Vasarhelyi 2014).
Unsuitable average
cost
As per the given case study analysis it has been discerned that the raw
materials has been valued as per the different rates of raw material
inventory at a particular cost which has been seen to be appropriate with
the present cost and the cost on paper has been identified to be more than
average. The fraud nature of the risk has been further seen to be
considered as per the various types the considerations which has been

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based on the various types of the concerns with new IT system and this
can be further monitored as per the evaluation of the financial statements.