Fraud Risk Analysis in DIPL
Added on 2020-03-02
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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:
AUDIT, ASSURANCE AND COMPLIANCE1Table of ContentsAnswer to Question 1: Results influence audit procedures.......................................................2Answer to Question 2: Material misstatement...........................................................................4Answer to Question 3a: Fraudulent risk.....................................................................................4Answer to Question 3b: Identified fraud risk from the scenario................................................6Reference:..................................................................................................................................7
AUDIT, ASSURANCE AND COMPLIANCE2Answer to Question 1: Results influence audit proceduresThe use of adequate analytical tools could eventually help in evaluating the resultsprovided by DIPL, which might directly influence the overall audit. In addition, analyticalprocedure such as ratio analysis and benchmark analysis eventually allows the analyst toevaluate performance of the organisation. This overall evaluation of the performance wouldeventually help in identifying the need for an audit report. Chyz, Gal-Or and Naiker (2016)mentioned that with the help of ratio analysis overall financial status of an organisation couldbe identified. In addition, the benchmark method could also help in identifying relevantproblems that is persistent in an organisation, which needs to be controlled by themanagement.Moreover, ratio analysis can be used to identifying the overall financial condition ofDIPL In three fiscal years. The use of financial ratios could eventually allow analyst toevaluate the performance of DIPL and understand what the relevant problems that ishindering its progress.Moreover, the evaluation of the annual report could eventually help inidentifying the trend and detecting the overall manipulations that might have been conductedto the annual report for boosting it financial health. On the other hand, Hut-Mossel et al.(2017) argued that financial ratios mainly allow the analyst to evaluate financial trends anddetect any kind of problems, which might augment the need of an audit.Particulars201320142015Net profit 2,359,190 2,291,362 2,972,183 Current liabilities 3,780,000 5,120,250 6,397,500 Current assets 5,385,938 7,509,150 9,600,929 Revenue 34,212,000 37,699,500 43,459,500 Total liabilities 3,780,000 5,120,250 13,897,500 Depreciation 249,375 274,312 472,688 Solvency ratio69.01%50.11%24.79%Current ratio 1.42 1.47 1.50 Profit margin6.90%6.08%6.84%
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