Effect of Risk Factors on Audit Conduct
Added on 2020-02-24
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Running head: AUDIT, ASSURANCE AND COMPLIANCEAudit, Assurance and ComplianceName of the Student:Name of the University:Author Note:
2AUDIT, ASSURANCE AND COMPLIANCETable of ContentsQuestion 1........................................................................................................................................2Part A...............................................................................................................................................2Explanation of analytical procedures that is important for preparation of financial reports ofDIPL................................................................................................................................................2Profitability Ratio............................................................................................................................2Gross Profit Ratio........................................................................................................................2Net Profit ratio.............................................................................................................................4Return on assets...........................................................................................................................5Return on Equity..........................................................................................................................6Liquidity ratio..................................................................................................................................7Current ratio.................................................................................................................................7Quick ratio...................................................................................................................................8Efficiency ratio................................................................................................................................9Inventory turnover ratio...............................................................................................................9Solvency Ratio...............................................................................................................................11Debt to Equity Ratio..................................................................................................................11Part B.............................................................................................................................................12Impact of analytical review on audit planning for the year ending 30th of June 2015...................12Question 2......................................................................................................................................13
3AUDIT, ASSURANCE AND COMPLIANCEClassification of inherent risk factors based on nature of business operations of DIPL...............13Question 3......................................................................................................................................14Part A.............................................................................................................................................14Identification of key risk factors that relates to misstatement of financial reporting....................14Part B.............................................................................................................................................15Effect of risk factors on audit conduct...........................................................................................15Reference List................................................................................................................................16
4AUDIT, ASSURANCE AND COMPLIANCEQuestion 1 Part AExplanation of analytical procedures that is important for preparation of financial reportsof DIPL Ratio analysis is the most widespread tools used by companies for analyzing a businessfinancial standing (William, Glover and Prawitt 2016). This analysis is very easy to understandand compute that makes it so famous than any other accounting measurement tools. It is used bylarge and small companies for comparing their financial information. This ratio does not takeinto account the company size or the industry. This analysis is just a raw computation offinancial position as well as performance of any business enterprise irrespective of nature andsize of operations. In similar ways, this study uses ratio analysis measurement tool for predictingthe financial performance of Double Ink Printers Limited. The study had used four broadcategories of ratio analysis such as profitability ratio, liquidity ratio, efficiency ratio andsolvency ratio (Simnett, Carson and Vanstraelen 2016). Profitability Ratio Gross Profit Ratio Double Ink Printers Limited201320142015Gross Profit 17.5508593516.126208615.1969075
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