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
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 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
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.).
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).
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
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.
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).
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.
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 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. |
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).
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.
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