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Audit Assurance 12 Report on Audit Assurance and Compliance Risk

   

Added on  2020-03-04

15 Pages2935 Words70 Views
Audit Assurance 1Report on Audit Assurance and Compliance Risk
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Audit Assurance 2Table of ContentsIntroduction:...............................................................................................................................4Question 1:.................................................................................................................................5Apply analytical procedures to the financial report information of DIPL for the last threeyears. Explain how your results influence your planning decisions for the audit for the yearending 30 June 2015...................................................................................................................5Question 2..................................................................................................................................7Identify two inherent risk factors that arise from the nature of DIPL’s business operations.Explain why it is a risk and how it may affect the risk of material misstatement in thefinancial report...........................................................................................................................7Question 3: As part of your audit of DIPL for the year ended 30 June 2015, you areconsidering the risk that fraud may have occurred..................................................................10(a) Based on the background information for DIPL contained in the case, identify andexplain two key fraud risk factors relating to misstatements arising from fraudulentfinancial reporting to which DIPL may be susceptible........................................................10(b) Explain how the risk factors identified in (a) above would affect the conduct of the (a)audit......................................................................................................................................11Conclusion:..............................................................................................................................13References................................................................................................................................14
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Audit Assurance 3Introduction:The basic propose lying behind the preparation of this report is to develop the understandingon the audit assurance and compliance. This case problem is based on the organization ofDouble Ink Printers Ltd (DIPL). This report will focus on analysis of DIPL financial reportsfor the three years. At the same time, report also has a focus on the study of decision relatedto planning of the audit in organization. On the other hand, this report also focuses on theinherent risk factors in auditing. In this report, there is also a discussion on how inherent riskfactors affect the risk of misstatement in the financial reports. Finally, this case study focuseson analysis of different fraud risk factors, which are related to the misstatements arisingthrough the fraudulent financial reports.
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Audit Assurance 4Question 1: Apply analytical procedures to the financial report information of DIPL forthe last three years. Explain how your results influence your planning decisions for theaudit for the year ending 30 June 2015Basically, the Double Ink Printers Limited is engaged in the business of printing of books andmagazines, advertising materials for different articles, trading in different books on the basisof demand. The company use to print the exact number of books that it has received in itsorders from different customers. Company provides a fee of 5% of its revenue to thepublishers for publish its books. Short term turnover policy has followed by the organisation.Apart from this, the company is also going to start its online portal in order to publish itsbooks and magazines (Collis and Hussey, 2013). Analytical procedure can be defined as a set of methods and procedures that is used for thepurpose of analysing the approximate relationships between the financial and non-financialaspect of data on order to evaluate the financial facts and findings of the company. They arealso done to find out deviations that are occurring due to other related information. Expectingthe existence of approximate relationship between various data provides the basic premise forthe application of analytical procedure (Lobo and Zhao, 2013).There are four stages comprising the analytical procedures:Developing an independent expectation’: This is the initial stage of analytical procedure.Developing an expectation for recorded amount or data comprises this step. Every auditor isrequired to develop an independent expectation about the data. Identification of relationshipsbetween the financial and non-financial aspect of data can help the auditor in developing this.Defining a significant variation’: Before proceeding the analytical procedure, the auditorsare required to develop a reasonable difference between expected data and the data provided
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