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HI6026 - Assignment - Audit, Assurance & Compliance

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Holmes Institute Sydney

   

Audit, Assurance and Compliance (HI6026)

   

Added on  2020-03-07

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In the HI6026 Assignment, we will discuss Audit, Assurance & Compliance. We cover analytical procedures for the financial report information of DIPL, two inherent risk factors that arise from the Nature of DIPL’s Business Operations, and factors relating to misstatements arising from fraudulent financial reporting.

HI6026 - Assignment - Audit, Assurance & Compliance

   

Holmes Institute Sydney

   

Audit, Assurance and Compliance (HI6026)

   Added on 2020-03-07

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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 - Assignment - Audit, Assurance & Compliance_1
1AUDIT, ASSURANCE AND COMPLIANCETable of ContentsAnswer to Question 1:.....................................................................................................................2Answer to Question 2:.....................................................................................................................5Answer to Question 3:.....................................................................................................................6Answer to Part A:........................................................................................................................6Answer to Part B:.......................................................................................................................10References:....................................................................................................................................11
HI6026 - Assignment - Audit, Assurance & Compliance_2
2AUDIT, ASSURANCE AND COMPLIANCEAnswer to Question 1:At the time of preparing the plan of audit in the context of DIPL, the analytical methodassociated with financial information offers considerable support. On the contrary, audit planhelps in giving the required directions and instructions to the auditors while carrying out theoperations of audit. In a precise manner, the plan of audit provides the auditors with anopportunity in maintaining the cost of audit to a specific degree for curbing any sort of confusionwith the clients (Chou 2015). The analytical method related to the financial information of theorganisation denotes the method of transferring financial information from various financialorganisational announcements. The method of evaluating financial information of the organisations could be conductedthrough specific mechanisms. This analytical method helps in assessing the financialinformation, which would enable the financial analysts and accountants for making certainfinancial and accounting decisions. The analytical approach is common size that enables in themethod of dissecting the financial announcements of the firm from pertinent reference points.The fundamental advantage is that it lends support to differentiate the financial statements fromspecific timelines (Cohen and Simnett 2014). With the help of financial reports, the financial analysts and accountants could utilisedifferent lines of items along with the checking the preparation base for the organisations. Forinstance, the method of registration of different financial and accounting items in financialstatements like overall liabilities, owner’s equity and assets could be adjudged along withinvestigation of detour from the regular position.
HI6026 - Assignment - Audit, Assurance & Compliance_3
3AUDIT, ASSURANCE AND COMPLIANCEThe major analytical method of financial information is benchmarking and it is possibleto use this method for dissecting the audit plan of the organisation. In addition, this method ofbenchmarking helps in detecting the variances in the financial statements of the organisationsand the actual reasons behind the happening of such variances could be ascertained by evaluatingthe actual causes of these variances. Besides the process of benchmarking, ratio analysis isadjudged as a primary analytical method pertaining to the financial information of the firms.Thus, ratio analysis is of utmost importance for differentiating the financial statements of two ormore organisations for preparing the plan of audit (Duncan and Whittington 2014).Explanation:The analytical methods of the organisations in assessing the financial information couldresult in considerable effect on the creation of the process of audit planning and this is crucial totransfer the financial information among the different departments of the firm. The below-mentioned ratios have been taken into account for meeting the purpose:Particulars201320142015Profit margin0.0680.600.06Solvency ratio 0.620.440.21Current ratio1.421.461.50According to the above table, the current ratio of DIPL for the years 2013, 2014 and 2015have been obtained as 1.42, 1.46 and 1.50 respectively. Another instance has been depicted in theform of profit margin, which has been 0.068, 0.60 and 0.06 in the years 2013, 2014 and 2015respectively. This evaluation of profit margin helps in depicting the amount of net profit gainedin contrast to the net revenues of DIPL. Moreover, this evaluation of profitability enables thefinancial experts and accountants to gain an understanding of the overall organisational
HI6026 - Assignment - Audit, Assurance & Compliance_4

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