Ask a question from expert

Ask now

HI6026 - Assignment on Audit Assurance and Compliances PDF

11 Pages2662 Words206 Views
   

Holmes Institute Sydney

   

Audit, Assurance and Compliance (HI6026)

   

Added on  2020-03-04

About This Document

In the HI6026 Assignment, we have discussed Audit Assurance & Compliances, in this assignment, we cover three questions. Analytical procedures of the financial statement are among the various Financial Audit Procedure that helps the auditor understand the business. An inherent risk is that risk that is posed by omission or error in the financial statement owing to the factor except for the control failure. A business may lose a considerable amount of its assets owing to fraud. The impact of fraud can even lead to the closure of the business.

HI6026 - Assignment on Audit Assurance and Compliances PDF

   

Holmes Institute Sydney

   

Audit, Assurance and Compliance (HI6026)

   Added on 2020-03-04

BookmarkShareRelated Documents
Running head: AUDIT ASSURANCE AND COMPLIANCEAudit assurance and complianceName of the studentName of the universityAuthor note
HI6026 - Assignment on Audit Assurance and Compliances PDF_1
1AUDIT ASSURANCE AND COMPLIANCETable of ContentsQUESTION 1.............................................................................................................................2QUESTION 2.............................................................................................................................4QUESTION 3.............................................................................................................................7Reference....................................................................................................................................9
HI6026 - Assignment on Audit Assurance and Compliances PDF_2
2AUDIT ASSURANCE AND COMPLIANCEQUESTION 1Analytical procedures of the financial statement are among the various financial auditprocedure that help the auditor to understand the business and any changes in the business ofthe client and to recognize the potential risk sectors for planning the other audit procedures.The analytical procedures also include the analysis of financial information. The auditor willapply the analytical approach with regard to the financial statement of DIPL to break downthe problems into the components required for solving it (Arens et al. 2016). The analyticalapproach that will be applied by the auditor will be same like the formal analysis. Theanalysis procedures can be performed through utilization of various strategies andapproaches. However, the use of analytical procedure for the analysis of financial statementvarious financial analyst as well as the various accountant interpret the information indifferent way to arrive at the major business decisions (Cannon and Bedard 2016). The analytical approach assists in comparing the annual statements of theorganization for different periods or the comparison among different organization. Tocompare the financial statement, the analyst can take various items from the statement andcan analyse their reporting methods. For instance, the analyst can select the current liabilitiesand current assets to analyse the liquidity position of the company or can select the any otheritem like inventory to analyse its reporting method and the deviation, if any. Further, the auditplan can be analysed through using the analytical procedure benchmark (Ruhnke and Schmidt2014). Thereafter, the variance from the actual benchmark will assist in identifying thedifference and evaluations of the cause dedicated to the resulted variance. Apart from this, theanalysis of various ratios can be used as an appropriate approach that may be used for thecomparison of the information included in the financial statement and accordingly plan forthe audit.
HI6026 - Assignment on Audit Assurance and Compliances PDF_3
3AUDIT ASSURANCE AND COMPLIANCEImpact of result on planning decision of auditThe applicable reporting framework for the financial statement has great impact onthe audit planning. Further, the business operation of the client, the activities carried outunder the business and the availability of client’s data has great impact on the panningdecision of audit (Hayes, Wallage and Gortemaker 2014). Calculation of ratio Ratio Formula201320142015Current ratio Current assets / Current Liabilities 1.421.471.50Profit margin ratioNet income / Net sales0.070.060.07Solvency ratioEquity / Total assets0.710.680.47From the above table, it is identified that the current ratio of the company are 1.42,1.47 and 1.50 respectively for the year 2013, 2014 and 2015. The current ratio of thecompany indicates that DIPL is in good position to pay off its current obligation with theavailable current assets. Further, the profit margin ratio of the company reveals the ability ofthe DIPL to convert its sales into net income. The profit margin of the company is 7%, 65 and7% respectively for the year 2013, 2014 and 2015. It shows that the company’s profit marginis quite stable and did not change much during the 3 years. This states the analyst to find outwhether the expenses incurred y DIPL is high or low. These ratio analyses will assist theanalyst to make the future plan for the audit. The unfavourable or the favourable changes forthe ratio can be used as the reference for the audit of the financial statement of DIPL(Hematfar and Hemmati 2013). Further, the solvency ratio of DIPL as calculated above is0.71, 0.68 and 0.47 respectively for 2013, 2014 and 2015. The solvency ratio will assist theanalyst to analyse the financial condition of DIPL. On the other hand, the comparison of theratios over the three years period will help in evaluating the overall changes in theperformance of DIPL. The analyst will be able to get the idea regarding the financial position
HI6026 - Assignment on Audit Assurance and Compliances PDF_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
HI6026 - Report on Audit, Assurance and Compliance
|8
|2074
|55

HI6026 - Audit, Assurance and Compliance | Assignment
|12
|2880
|56

HI6026 Audit, Assurance and Compliance | Individual Assignment on DIPL
|9
|1684
|75

Audit, Assurance and Compliance - HI6026
|10
|2715
|41

HI6026 Auditing & Assurance Services | Assignment
|9
|2489
|42

Audit Assurance and Compliance Name of University: Author: Answer to Question 1
|11
|2825
|218