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Solved Assignment on Auditing

   

Added on  2021-06-14

14 Pages3381 Words29 Views
Running head: AUDITINGAuditing Name of the StudentName of the UniversityAuthor Note
Solved Assignment on Auditing_1
2AUDITINGTable of ContentsAnswer to question 1:.................................................................................................................3Requirement a)...........................................................................................................................3Requirement b)...........................................................................................................................4Requirement c)...........................................................................................................................5Requirement d)...........................................................................................................................7Answer to question 2:.................................................................................................................8Requirement a)...........................................................................................................................8Requirement b)...........................................................................................................................9Requirement c).........................................................................................................................10Answer to question 3:...............................................................................................................11Requirement a).........................................................................................................................11Requirement b).........................................................................................................................12Requirement c).........................................................................................................................13References list:.........................................................................................................................15
Solved Assignment on Auditing_2
3AUDITINGAnswer to question 1:Requirement a)Printing solutions limitedLiquidity RatiosCurrent Ratio201520162017Current Assets782.001,170.001,452.00Current Liabilities507.00835.00887.00Current Ratio1.541.401.64Quick Ratio201520162017Current Assets78211701452Inventory350.00510.00680.00Prepaid Expenses0.000.000.00Quick Assets432.00660.00772.00Current Liabilities507.00835.00887.00Quick Ratio0.850.790.87Solvency RatioDebt Ratio201520162017Total Liabilities1,007.001,835.002,387.00Total Assets1,702.002,670.003,302.00Debt Ratio0.590.690.72Debt to Equity Ratio201520162017Total Liabilities1,007.001,835.002,387.00Total Equity695.00835.00915.00Debt to Equtiy Ratio1.452.202.61Efficiency Ratio201520162017Total Asset Turnover 1.551.221.03Net Sales2,060.002,660.003,080.00Average total Assets1329.502186.002986.00Inventory Turnover Ratio5.64Cost of goods sold156620102350Average inventory277.5430595201520162017Profitability ratioReturn on equity0.220.170.09
Solved Assignment on Auditing_3
4AUDITINGAverage Total Asset1329.502186.002986.00Net Income154.00140.0080.00Return on Asset0.1160.0640.027Requirement b) The issues of going concern of Printer Solutions Ltd can be analyzed by conductingtrend and ratio analysis that helps in evaluating the financial performance of company over aperiod of time. Auditors are required to make an important judgment about the going concernwhether the organization is in considerable distress. As per the auditing standard, auditorsshould evaluate the financial position after the auditing of the statements has been done.Ratio analysis enables auditors to evaluate the information available in the balance sheet andincome statement of company and ascertain existence of any relationship between theelements that is unusual (Ahn & Jensen, 2017). The evaluation of financial position of Printer solutions limited is done based on theinformation and figures that is depicted in the financial statements. Such evaluation is doneby analyzing the liquidity, solvency, efficiency and profitability position of company. Currentratio of company initially reduced from 1.54 in year 2015 to 1.4 in year 2016 and thereafter itincreased to 1.64 in year 2017. On other hand, quick ratio stood at 0.85 in year 2015 thatreduced to 0.79 in year 2016 and further the value increased to 0.87 in year 2017respectively. It is depicted from the analysis of figures that liquidity position of company hasdeclined initially and it has improved thereafter. Now, looking at the solvency ratio that isdebt ratio and debt to equity ratio, it can be seen that value has increased continuously. Debtratio has increased from 0.59 in year 2015 to 0.69 in year 2016 and further it has increased to0.72 in year 2017 respectively. This is indicative of the fact that company is highly leveragedand their ability to pay liabilities using assets have declined. On other hand, looking at the
Solved Assignment on Auditing_4

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