Mentioning Could Influence Audit Proceduresâ€Myassignmenthelp.Com

Question: Discuss About The Mentioning Could Influence Audit Procedures? Answer: Introducation From the evaluation of the case study of DIPL relevant audit plans could be identified, which might be used in evaluating the financial information of the company. The relevant analytical approach could be used in identifying the overall financial trend, which might be used in identifying the overall needs for an audit operation. Baylis et al. (2017) stated that with the help of audit procedures organisation are able to identify the minimum expenses needed for completing the audit procedure. Furthermore, relevant analytical approach can be used in identifying the overall financial trend of DIPL. The overall use of common sized analytical approach could directly allow the analyst to use the approach for analysing the overall financial reports declared by the organisation. The use of relevant analytical approach such as ratios and benchmarking could be identified as the viable approach for analysing performance of DIPL. In addition, the use of benchmarking could directly help in identifying the overall financial stability of the organisation. The use of benchmarking could directly allow the analyst to evaluate the overall financial performance of the organisation, where relevant problems in operations could be identified. Moreover, relevant ratios could also be used in the analytical approach, where it might directly compare returns of the company with its previous fiscal year. Duncan and Whittington (2014) mentioned that ratios mainly allow the organisation to identify the relevant trend in the overall financial report, which could help in detecting the overall progress and decline in the financial stability of an organisation. Therefore, ratios are mainly used as the overall analytical approach for evaluating the performance of the DIPL in the three fiscal years. Particulars 2013 2014 2015 Net profit 2,359,190 2,291,362 2,972,183 Current liabilities 3,780,000 5,120,250 6,397,500 Current assets 5,385,938 7,509,150 9,600,929 Revenue 34,212,000 37,699,500 43,459,500 Total liabilities 3,780,000 5,120,250 13,897,500 Depreciation 249,375 274,312 472,688 Solvency ratio 69.01% 50.11% 24.79% Current ratio 1.42 1.47 1.50 Profit margin 6.90% 6.08% 6.84% The overall evaluation of the above table relevant ratios of DIPL could be identified, where relevant financials trend in the performance of the organisation could be pinpointed. The overall financial ratios of the company mainly improved over the period of three fiscal years, where only the profit margin of the company declined. However, both sales and net profit of the organisation has drastically increased, which only indicates the high-end expenses conducted by the organisation. Moreover, relevant improvement in solvency and current ratio of the company could be seen. The declining solvency condition mainly states the companys overall financial position, which is improving. The current ratio of the company has also increased to 1.50 in 2015, which depicts ability of the company to support its short-term obligations. Moreover, the overall declining profitability and increment in relevant expenses could be identified from the overall evaluation of ratios (Homb et al. 2014). From the overall evaluation of ratios, relevant undesirable trend of the company performance could not be identified. This undesirable trend in the overall financial condition of DIPL is mainly identified from the evaluation of ratios. The ratio evaluation mainly helps in identifying the overall position where the companys operations are desirable or not could be identified. Therefore, adequate corrective measures need to be conducted by the management of DIPL for identifying the current financial position of the company. This mainly helps in identifying the needs for relevant audit procedures needed by the organisation (Hut-Mossel et al. 2017). Depicting different risk and its impact on material misstatement The evaluation of the overall case study of DIPL mainly helps in pin pointing the relevant risk, which is directly increasing the chance of material misstatement. The two different type of material misstatement risk could be identified, which could directly increase the inheritance risk of DIPL. The first risk of inheritance can be portrayed from the omission in the record keeping where the employee of the organisation did not conduct relevant transactions. The management mainly needed a new system, which increased pressure on the employees to covert the transaction and relevant use the system at short durations. This increased pressure on the employees could directly increase the overall misstatement risk, which could directly increase organisations inherence risk. There are relevant problem, which could be identified from the overall evaluation of the case study. The current employee that is maintained by the company is not relevant for the finance department, which is increasing t he overall misstatements in the organisation (Schmidt, Wood and Grabski 2016). Moreover, the company has also failed achieve the targeted profits, where the management is mainly responsible. The management was not putting all the relevant input in the business for supporting the activities and achieving the targeted goals. The lack of integrity and motivation level in management was relevantly low, which is directly affecting the overall performance of the organisation. In addition, the relevant complexities could be identified from selection process that was used by the management in promoting a new CEO. This ineffective process of the management could directly affect the overall inheritance risk of the organisation, which could in turn hamper relevant problems faced by the company. Furthermore, there is relevantly low employees, which is been employed by the organisation in changing the overall accounting system. This could directly increase the overall manipulations and material misstatements, which in turn could increase the inheritance risk of the organisa tion. Shafii, Abidin and Salleh (2015) mentioned that the overall increment in the inheritance risk could increase the implementation of audit report for identify the overall financial condition of the company. Therefore, from the evaluation it could be understood that there is excessive workloads on the employees, as new accounting system is been imposed by the organisation. This excessive pressure has mainly increased the chance of material misstatement and omission of relevant transaction in the financial report. Moreover, there are relevant issues in the poor booking system, which could directly affect the overall financial report of the organisation. Thus, the organisation is mainly portrayed high-end incentives to its management, which raise the unethical concern that might increase material misstatement affecting its financial report. Mentioning two key fraud risk There are relevant different types of risk, which could hamper operation of the company and increase its material misstatement. The overall risk such as fraudulent activities risk and financial misstatement risk are mainly identified from the overall case study. The explanations of the overall risks are mainly depicted as follows. Fraudulent activities of the employees The overall fraudulent activities are mainly detected from the employees of DIPL, where the workforce of the organisation is mainly manipulating relevant transactions. Management mainly forced the employees to use the new counting machine, which increased relevant pressure. Thus, it is determined that overall manipulations conducted with employee for directly increases the material misstatement in the financial report of the organization. Fraudulent activities used by the employees in completing the change in accounting software would it increase the material misstatement and increase the inheritance risk. Furthermore, there was relevantly minimum workforce present in the organization, with relevant low experience and efficiency. This mainly increase the chance of material misstatement, employees will not be able to adequately record all the transactions conducted by the organization (Thaweejinda and Senivongse 2014). Manipulation in the financial report The second fraud can be detected from the overall manipulations conducted in the financial report. The organisation need a loan of 7.5 million from BDO Finance, which has a relevant measures that needs to be maintained by the organisation for the continuing the loan. DIPL mainly needs a current ratio of 1.5 and debt to equity ratio less than 1. Therefore it could be estimated that the management could manipulate the overall values in the financial report to comply with the loan requirements, as it needs the loan to continue with its business operation. This could mainly increase the overall material misstatement, where relevant inheritance risk increases (Schmidt, Wood and Grabski 2016). Mentioning how identified fraud risk could lead to audit The overall case study mainly helps in identifying the overall risk that is affecting the overall financial report of the organisation. There are relevant frailer activities, which could be conducted but the employee, when implementing the new accounting system. The pressure inputted by the management could have led to the overall manipulation of the financial report. Therefore, the organisation could use adequate monitoring system, which could adequately reduce the overall fraudulent activities in DIPL. Moreover, the valuation of raw materials is relevantly valued at wrong cost, where the average costing is used, while the use of normal costing needs to be conducted. This could directly help in reducing the overall manipulations in the financial report. Thus, the use of overall audit procedures could directly help in identifying the overall problems that is hindering operations of the organisation (Winer et al. 2015). 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