Analysis of Audit Assurance and Compliance Report for DIPL

This report provides a detailed analysis of audit assurance and compliance for Double Ink Printers Limited (DIPL). It begins by examining the analytical process used to construct the audit plan, emphasizing the significance of financial data dissemination. The report presents financial ratios, including solvency, profit margin, and current ratios, to assess DIPL's financial performance. It then explores factors contributing to material misstatements in financial disclosures, such as employee proficiency and work pressure. The report further identifies key risk factors, including workforce engagement in fraudulent activities and financial reporting processes. The analysis is based on the provided case study of DIPL and its financial data.

Running head: AUDIT ASSURANCE AND COMPLIANCE
Audit Assurance and Compliance
Name of the Student:
Name of the University:
Author’s Note:

1AUDIT ASSURANCE AND COMPLIANCE
Table of Contents
Answer to Question No 1...........................................................................................................2
Answer to Question No 2...........................................................................................................4
Answer to Question No 3...........................................................................................................7
Part A.....................................................................................................................................7
Part B....................................................................................................................................10
Reference List..........................................................................................................................11

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Answer to Question No 1
The analytical process that persists with the financial data of Double Ink Printers
Limited (DIPL) has been an influential factor for the construction of their audit plan. The
constructed plan could be regarded as a parameter that would become a key to be followed
during the preparation of the audit. The analytical method for the financial declarations of
DIPL specifies the process of dissemination of the data (Rajkumar, 2014).
Explanation to the Case Study
The end result of the decision planning related with the planning of the audit is
persuaded mostly through the results of the analytical process in order to publicize the data
from the financial statements. The tables given below provide the financial ratios that have
been constructed with respect to the case study (Sharma, 2016).
Particulars 2013 2014 2015
Solvency ratio 0.62 0.44 0.21
Profit margin 0.068 0.60 0.06
Current ratio 1.42 1.46 1.50
The table that has been computed above has revealed that the current ratio of DIPL
has grown over the last three years. Furthermore, the margin profit has been noticed to be
changing for the last few years. By taking assistance of the ratios computed above, the net
profit margin of DIPL can be contrasted with the total profit that has been created
Answer to Question No 2
There are several factors that are intrinsic in nature during the constitution of the
incidence of the misstatement of the materials in the financial disclosures of a specific

3AUDIT ASSURANCE AND COMPLIANCE
individual. Conversely, it is natural for the existence of several types of unsystematic and
systematic risks that shows a path for the misstatement of the financials in the financial
declaration of DIPL (Makharia and Makharia, 2015).
Moreover, the DIPL employees are does not have sufficient insights and has a lower
level of proficiency level. That has led to the rise in the level of internal risk for DIPL.
Additionally; this shortage of experience may lead to the commitment of faults thereby
leading to the increase in the level of risk
Rise in the pressure on the management and the employees
It has been noticed that due to the increase in the work pressure of the employees who
are working in DIPL, there has been fraudulent accounting within the company. As an
outcome the numerous qualities have occurred that are inclusive of the inclination in
differentiating cash flows, improper liquidity and operational outcomes (Kamal, 2014.).
Misrepresentation
The increasing pressure of work on the employees of DIPL has led to the ineffective
accounting. It is due to this effect that several aspects have taken place that is inclusive of the
tendency in meeting the cash slow statements, operational outcomes and inadequate liquidity
(Sharma, 2016).
Overall management integrity
According to the case study, the administration of DIPL has ineffective integrity and
is predicted to be aware of fall in the brand image within the society of business

4AUDIT ASSURANCE AND COMPLIANCE
Overall management integrity
In accordance with the provided case study, the DIPL administration has the
integration deficiency and it is anticipated to be prepared for any sort of reputation loss in the
organizational society.
Abnormal burden on the management
It has been observed that frequently there has been a survival of remunerations for the
administration. As an outcome, it may lead to financial reporting misstatement (Ackam Isaac,
2016).
Nature of business entity
DIPL has sustained to expansion for the key competitive and economic situations.
Furthermore, these aspects may have an impact on the intrinsic threats of the business for the
evaluation of the framework of audit planning in a suitable manner.

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Answer to Question No 3
Part A
The data with respect to DIPL has been obtained taking the assistance of the provided
case study and this data has been influential for the disclosure of the potentiality for the
implementation of a precise construction of the financial report procedure of DIPL. The
various significant risk factors are shown in the table below:
Risk Type Explanation
Workforce engagement in fraudulent
activities
After the examination of the data that has
been observed from the case study of DIPL,
it can be cited that the significant counterfeits
of risk is in association to the employees of
DIPL as they have the probability to be
related to the activities. The significant
factors that is related with the threat is the
dissatisfaction among the employees of
DIPL. It has been noticed that the
introduction of the new accounting process
creates a massive stress in the employees,
there is a rise in the level of threat as the
staffs may be related with various fake
practices (Duncan and Whittington,
2014).Hence, in order to perform as a remedy

6AUDIT ASSURANCE AND COMPLIANCE
for the method of reconciliation, the DIPL
staffs improvise several false practices and
these methods may lead to the misstatement
of the financial reports..
Processes related to financial reporting There have been various risks that have been
observed with respect to the process of
financial reporting of DIPL.
Part B
According to the DIPL case study, there have been a key shortage in the raw material
valuation of DIP, that is dependent on the computation of the average cost. The main reason
has been the rise in the paper cost that is a value more than the average cost. Thus it can be
said that it is not a precise method (Nalewaik and Mills 2016).

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Reference
Ackam Isaac, t.e.t.t.e.h., 2016. Governance in senior high schools in Ghana. Is there any
lessons learnt from the report of the auditor general? (Doctoral dissertation).
Duncan, B. and Whittington, M., 2014, September. Compliance with standards, assurance
and audit: Does this equal security?. In Proceedings of the 7th International Conference on
Security of Information and Networks (p. 77). ACM.
Kamal, A.M., 2014. Industrial attachment report on Esquire Knit Composite Ltd. Daffodil
International University.
Makharia, p. and Makharia, g., 2015. Shree Pushkar chemicals & fertilisers limited.
Nalewaik, A. and Mills, A., 2016. Project Performance Review: Capturing the Value of
Audit, Oversight, and Compliance for Project Success. CRC Press.
Rajkumar, G., 2014. Steps for Success in Sourcing of Hard Gelatin Capsules for
Pharmaceutical Use. International Journal of Drug Regulatory Affairs, 2(1), pp.32-36.
Sharma, K., 2016. Conceptualization of Green HRM and Green HRM Practices:
Commitment to Environment Sustainability.
Sharma, K., 2016. Conceptualization of Green HRM and Green HRM Practices:
Commitment to Environment Sustainability.