ACC101- Report | Analysis of Financial Information
Added on 2020-03-13
11 Pages2774 Words79 Views
ANALYSIS OF FINANCIAL INFORMATION AND RISK FACTORS OF DOUBLE INK PRINTERS LIMITED (DIPL)Student Name Student ID
EXECUTIVE SUMMARYWith this report, the main area of the focus has been the auditing and its aspects. As the title ofthe report states that the analysis has been done of the financial information of the company, themain emphasis has been laid on the process that is being followed by the company since itsinception for both financial and non financial matters and how the same is required to be dealt bythe auditors while planning for the audit for the year ending as on that date. The main aim of thereport is to provide how the auditor will plan his audit while conducting the preliminaryanalytical procedures. The second major aim for which the report is prepared is to identify theinherent risk factors that has arisen from the nature of the business of the company and theprocedure that the company have followed from its incorporation for accounting of the incomesand expenses and procedures adopted to maintain the internal control system. The third majoraim is to identify the areas where there are chances of having the possibilities of fraud is veryhigh and which may affect the true and fair view of the financial statements. With these aims, thereport has been prepared. 2
Table of ContentsExecutive Summary2Introduction4Audit Planning5Inherent Risk Factors 8Fraud Risk Factors and Its Impact on Audit9Conclusion and Recommendation10References113
INTRODUCTIONFinancial statement plays a very vital role for assessing the financial position and financialperformance of the company. Financial position is displayed by the statement of affairs or thebalance sheet and the financial performance is given by the statement of profit and loss for theperiod ending. These financial statements should be prepared and presented in such a mannerthat the financial position and the financial performance of the company shall be displayed to theusers of the financial statements in the true and fair manner. If in any case the financialstatements are not prepared in that manner then the chances of having the bad reputation of thecompany in the market increases and gradually the chances of having the fraud occurrencewithin the company will increase. Thus, the financial statements are the backbone of thecompany and it shall be prepared with utmost due care. Through this report, the financialstatements and its requirements have been better viewed from the angle of the auditors of thecompany. Auditors are the persons who certify that the company’s financial statements reflectthe true and fair view of the financial position and performance of the company. Thus, whileconducting the audit, the auditors are required to plan the audit in such a way that no area shallbe left and escape without the proper scrutiny by the auditors. The aforesaid duty of the auditor is the major underline objective of the report. For the purposeof the analysis, the company – Double Ink Printers Limited has been made available with properbackground information and the last three years financial information. In the beginning theexecutive summary has been detailed giving the aims of the report. Thereafter, introduction hasbeen given about the report. Then the main body of the report has been started with the layout ofthe plan that the auditors have prepared using the analytical procedures and how the same haveaffected the planning decision. Secondly, as part of the audit, the risk assessment has been doneand two inherent risk factors have been identified from the nature of the operation of the businessand it has been explained as to how the risk have affected the risk of material misstatement in thefinancial statement. Thirdly, the risk factors have been identified which contributes to thefraudulent reporting of the transactions and has been explained as to how the risk factors haveaffected the audit. The report then has been ended with the proper conclusion and recommendation.4
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