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Analytical Review on Audit Planning for Double Ink Printers Limited

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Holmes Institute Sydney

   

Audit, Assurance and Compliance (HI6026)

   

Added on  2020-03-01

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In this report HI6026 - we have discussed questions answers related to Audit Assurance and Compliance of  DIPL. 1. Application of analytical procedures to the financial report information of DIPL. 2. Identification of inherent risk factors that arise from nature of business operations of DIPL. 3. Identification and explanation of two key fraud risk factors relating to misstatements arising from fraudulent financial reporting.

Analytical Review on Audit Planning for Double Ink Printers Limited

   

Holmes Institute Sydney

   

Audit, Assurance and Compliance (HI6026)

   Added on 2020-03-01

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Running head: AUDIT, ASSURANCE AND COMPLIANCEAudit, Assurance and ComplianceName of the Student:Name of the University:Author Note:
Analytical Review on Audit Planning for Double Ink Printers Limited_1
2AUDIT, ASSURANCE AND COMPLIANCETable of ContentsQuestion 1........................................................................................................................................2Part A...........................................................................................................................................2Application of analytical procedures to the financial report information of Double Ink PrintersLimited.........................................................................................................................................2Profitability analysis................................................................................................................2Liquidity Analysis...................................................................................................................4Efficiency Analysis..................................................................................................................5Solvency Analysis...................................................................................................................6Part B...........................................................................................................................................7Impact of analytical review on audit planning for the year ending 30th of June 2015.................7Question 2........................................................................................................................................9Identification of inherent risk factors that arise from the nature of business operations of DoubleInk Printers Limited.........................................................................................................................9Question 3......................................................................................................................................10Part A.........................................................................................................................................10Key risk factors related to misstatement in financial reporting.................................................10Part B.........................................................................................................................................11Effect of risk factors on conduct of audit..................................................................................11Reference List................................................................................................................................12
Analytical Review on Audit Planning for Double Ink Printers Limited_2
3AUDIT, ASSURANCE AND COMPLIANCEQuestion 1Part AApplication of analytical procedures to the financial report information of Double InkPrinters Limited In this particular question, ratio analysis had been calculated for the company named asDouble Ink Printers Limited where analytical review had been applied by generating informationfrom annual reports of company (William, Glover and Prawitt 2016). Profitability analysis Profitability RatioDouble Ink Printers Limited201320142015Gross Profit 600450060795006604500Net sales 342120003769950043459500Gross Profit 17.5508593516.126208615.1969075Double Ink Printers Limited201320142015Net Income 235919022913622972183Net Sales 342120003769950043459500Net Profit 6.8957967966.07796396.83897192Double Ink Printers Limited201320142015Net Income 235919022913622972183Total Assets 129300001590390026147991Return on assets18.2458623414.407547811.3667738Double Ink Printers Limited201320142015Net Income 235919022913622972183
Analytical Review on Audit Planning for Double Ink Printers Limited_3
4AUDIT, ASSURANCE AND COMPLIANCEShareholderEquity 91500001078365012250491Return onEquity 25.7834972721.248482724.2617459Table: Profitability ratio of Double Ink Printers Limited(Source: Created by Author)From the annual report of Double Ink Printers Limited, profitability ratio is calculated forthe company for three consecutive years (2013, 2014 and 2015). Calculating profitability ratiofor a company help in predicting the profitability position of any business organizationAs far as gross profit ratio is concerned, it has declined over the three consecutive years.In the year 2013, the gross profit of DIPL was 17.55%, 16.12% in the year 2014. Therewas further decrease in gross profit at 15.19% for the year 2015 (Simnett, Carson andVanstraelen 2016). As far as net profit is concerned, it had declined from 2013 to 2015 and further increasedin the year 2015. In the year 2013, net profit of DIPL was 6.89% and 6.07% in the year2014. There was further increase in net profit at 6.83% in the year 2015. As far as return on assets is concerned, there was constant decrease from the year 2013 to2015. In the year 2013, return on assets of DIPL was 18.24 and 14.40 for the year 2014.There was further decrease in return on assets at 11.36% (Sierra‐García, Zorio‐Grima andGarcía‐Benau 2015). As far as return on equity is concerned, there was decrease in return on equity from 2013to 2014 and then further increase for the year 2015. In the year 2013, return on equity for
Analytical Review on Audit Planning for Double Ink Printers Limited_4

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