University Audit Report: DIPL Financial Analysis and Procedures

This audit report examines the financial statements of DIPL, focusing on the application of analytical procedures. The report outlines the importance of audit plans and the assessor's role in maintaining reasonable costs and minimizing misunderstandings. It details the analytical process, including the use of financial reports, common sizing, and benchmarking. The report also explains how results can be manipulated and provides an analysis of DIPL's financial ratios, including profitability, current, and solvency ratios from 2013 to 2015. The assessor's role in understanding the company's relative position and potential risks is highlighted. The report references relevant academic sources to support its analysis.

Running head: AUDIT
Audit
Name of the Student:
Name of the University:
Authors Note:

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Table of Contents
Applying analytical procedures...........................................................................................3
Explanation in which the result can be manipulated...........................................................4
Reference.............................................................................................................................6

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Applying analytical procedures
In this answer, the Analytical process organized on the financial report of DIPL
for the audit work has been explained. The audit plans were developed after analyzing the
financial report of the company. The audit plan that has been specifically developed for
the audit function should be strictly followed as a guideline during the performance of
audit function (Knechel and Salterio 2016). The assessor has an important task to
maintain the costs of audit within the reasonable level. It is also the responsibility of the
assessor to reduce the probability of misunderstandings with the customers within the
reasonable level. The financial reports for DIPL analytical process would be used, it
refers to the broadcast of information that can be accessed from the financial report of the
business organization. The given process is weighted or calculated as per the use of
different mechanisms (Simnett et al. 2016). It is significant to understand the declaration
in the financial reports. It is because after analyzing the information where many
accountants as well as financial analysts makes decision related to the application of the
analytical method.
The primary objective of the analytical approach using common sizing is to make
evaluation based on the common points. However, it is helpful in comparing financial the
financial statement for a particular period. The assessor is also responsible for evaluating
and verifying the different line of items that are reported in the financial report (Junior et
al. 2014). This includes how items are recorded in the financial statement like net
liabilities, net assets, movement in equity of the owner and verifying the debtor after
checking and comparing it with the normal works. The benchmarking is one of the
significant analytical process that can be applied as an audit process. In addition to this,

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deflection from the result of original financial report from that of benchmark results are
identified. The deviation are analyzed and the cause for the deviation is identified so that
any defect can be changed and the real trouble cab be explained (Greer et al. 2017).
In order to make the audit plan for the assessment the essential analytical
approach should be followed are comparative analysis of the financial reports and another
significant tool that can be used is ratio-analysis.
Explanation in which the result can be manipulated
Particulars 2013 2014 2015
Profit Margin 6.90% 6.08% 6.84%
Solvency Ratio 0.62 0.44 0.21
Current Ratio 1.42 1.47 1.50
Statement showing Ratio
The planning results are generally described and it has been performed during the
audit planning that affects the total analytical approach. This procedure is taken for the
reason of getting information from the financial statement. One significant role played by
ratio analysis is that it helps to get knowledge about the company’s financial position and
performance (Green et al. 2017). The ratio that indicates the profit margin of the
company is the profitability ratio. It represents profits that the organization earned and
looks at the overall firm’s performances. The past three year’s ratio of profitability of
DIPL from 2013-2015 are 6.90%, 6.08% and 6.84% etc. The current ratio that helps in
confirming and assessing the liquidity position of DIPL for the year 2013-2015 is 1.42,
1.46 and 1.5 etc.Ideal Current ratio is generally 2:1.

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The ratio of solvency of DIPL for the year 2013-2015 is .62,.44 and .21.Net cash
inflows stays adequate for both meeting of short term as well as long term liabilities for
DIPL after comparing the ratio results for 2013-2015.
The assessor’s role is ultimately to understand the company’s relative position by
analyzing 3 years performance and analyzing all aspects that might move towards some
unwanted or unfavourable situation of any business organization.

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Reference
Green, W., Green, W., Taylor, S., Taylor, S., Wu, J. and Wu, J., 2017. Determinants of
greenhouse gas assurance provider choice. Meditari Accountancy Research, 25(1),
pp.114-135.
Greer, P., Legge, K., Miri, N., Vial, P., Fuangrod, T. and Lehmann, J., 2017. OC-0537: A
remote EPID-based dosimetric auditing method for VMAT delivery using a digital
phantom concept. Radiotherapy and Oncology, 123, pp.S285-S286.
Junior, R.M., Best, P.J. and Cotter, J., 2014. Sustainability reporting and assurance: A
historical analysis on a world-wide phenomenon. Journal of Business Ethics, 120(1),
pp.1-11.
Knechel, W.R. and Salterio, S.E., 2016. Auditing: Assurance and risk. Taylor & Francis.
Simnett, R., Carson, E. and Vanstraelen, A., 2016. International Archival Auditing and
Assurance Research: Trends, Methodological Issues, and Opportunities. Auditing: A
Journal of Practice & Theory, 35(3), pp.1-32.

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