Corporate Social Variability Reports †Free Samples to Students

Question: Discuss about the Corporate Social Variability Reports. Answer: Introduction: The overall analytical process mainly allows the organisation to gather the required information for commencing the overall audit plan, which could help in identifying the actual financial position of an organisation. Furthermore, the overall problems that are faced by the organisation could be identified with the help of relevant analytical procedures such as benchmarking and ratios evaluation. Ashcraft et al., (2017) stated that with the help of adequate audit plan relevant audit procedures could be identified adequately, which could help in concentrating the overall cost of audit. Moreover, the evaluation of DIPL with the help of adequate analytical procedures could mainly help in identifying the overall financial condition of the company. Baylis et al., (2017) argued that the use of analytical approach is mainly conducted on the overall financial reports provided by the company, which could lose fiction if the reports are manipulated by the organisation. Moreover, there is an ade quate common size analysis approach, which allows the analyst to evaluate overall financial declaration provided by the organisation. There are many ways in which analyst are able to evaluate the performance of an organisation, which could be used in pinpointing its overall financial condition and position. The use of benchmarking and ratios could be identified as one of the adequate measures, which might be used by the analyst to evaluate the performance of the organisation. Furthermore, the overall problems with the help of benchmarking could be identified, where the analyst are mainly able to pin point the problematic areas in an organization. The benchmarking methods directly compare the company with its peers and evaluate the performance based on relevant industry benchmark. The use of ratio also allows the analyst to understand the overall financial position of an organisation and the relevant trend in which it is moving. Caissie et al., (2016) mentioned that overall use of analytical procedures and evaluation allows the analyst to understand the financial condition of an organisation and identified any manip ulation or unethical behaviour in drafting the financial report. Particulars 2015 2014 2013 Profit margin 6.84% 6.08% 6.90% Current ratio 1.50 1.47 1.42 Solvency ratio 24.79% 50.11% 69.01% The ratios depicted in the above table mainly represent the overall financial position of DIPL over the period of three fiscal years. The relevant profit margin of the company mainly declined over the period of three years with the solvency ratio. However, the overall current ratio of the company mainly inclined over the period of three years. This only indicates that relevant revenue generation capacity mainly declined, while the debt accumulation of the organisation also declined. This mainly portrayed the overall problematic condition of an organisation, where the revenue conduction declined, while the company needed more debt to continue its operations. The declining solvency condition of the company was mainly due to the low accumulation of debt conducted by the organisation. The use of ratios mainly helps in identifying the increment or decrease in overall revenue, expenditure, and effectiveness of the budget prepared by the organisation. Escobar Demeritt (2017) argued that ra tios mainly lose their authenticity if the overall financial report is been manipulated by the organisation, which directly affects the analytical approach. However, from the evaluation DIPL performance is mainly undesirable, where the organisation is not able to maintain the relevant profits. Moreover, the current ratio of the company is not adequately, where it is below standard level of 2. The overall decline in the performance condition of DIPL mainly encourages analyst to take corrective measures and identify actual performance of the organisation. Therefore, the evaluation of the above method could mainly help in identifying the problems faced by the organisation, where adequate analytical measures need to be conducted (Hut-Mossel, Welker, Ahaus Gans, 2017). Relevant problems could be identified from the evaluation of the case study of DIPL, which mainly consist of the inheritance risk affecting operations of the company. The overall case study also states that the management did not adequately record the various business transactions in its financial report. Furthermore, the overall inefficiency and ineffectiveness of the overall management mainly declined ability of the DIPL to perform adequately in the fiscal year. The declining revenue and net profit of the organisation mainly depicts the inheriting risk affecting operations of the business (Ismanto Hassan, 2017). From the overall evaluation, it is also understood that the staff working in DIPL has relevant inexperience and are inefficient in completing the relevant tasks. Furthermore, there is relevant unprofessionalism present in the current operations of DIPL, which directly increases the overall inheritance risk of the organisation. Moreover, the inheritance risk could be portrayed in the overall selection of the CEO, which was conducted by the organisation. James (2016) argued that inheritance risk involved in workforce of the organisation could increase the overall material misstatement conducted in an organisation. Moreover, DIPL does not have adequate workforce to support its operational capability, which is directly increasing the overall inherent risk of DIPL. Therefore, it could be understood the there is huge pressure on the employees of DIPL, which is directly increasing the overall work pressure on its workforce. This pressure on the workforce mainly increases the manipulation in financial statements, which is conducted by the employees. The management of DIPL is mainly not responsible for the lack of effective interpretation, which is not been conducted. The management is also lacking accountability and integrity, which is directly affecting the reputation of the organisation in the business world. Moreover, the material misstatement present in the current activities of the management and employee is directly affecting the overall financial reporting of DIPL. Therefore, it could be stated that the company mainly needs adequate audit evaluation for identifying the relevant impact of the inheritance risk on financial report of DIPL (Nalewaik Mills, 2016). Identified risk Impact of the risk on operations of the organisation Risk from fraudulent financial reporting process The evaluation of case study of DIPL mainly depicted relevant fraudulent activities, which was been conducted by employees of the organisation. Employee mainly conducted these fraudulent activities, as the management forced them to use the new accounting system. This adoption of the new accounting system mainly put immense pressure on the overall activities of the employees, which led to the augmentation of the fraudulent activities. Therefore, the staff could use the manipulations and fraudulent activities in coping with then reconciliation process. Thus, the increment in overall manipulation conducted by employees could directly increase the material misstatement in the annual report of the organisation. The evaluation also stated that adequate loss of financial information was mainly presented in the annual report, which directly increases the overall material misstatement of DIPL (Oliveri et al., 2016). Moreover, there is chance of inherent risk, as the overall organisation mainly deals with a workforce, which is inexperience and inefficient. Therefore, the overall activities that is conducted by the employees could directly increase the misstatement conducted in financial report of DIPL. Furthermore, the succession process of the CEO is also in question, where the accountability and integrity of the overall management is questioned (Robbins Meyer, 2016). Risk from the fraudulent activities conducted by employees The second risk is mainly portrayed from the fraudulent activities conducted in preparing the annual report of DIPL. The company mainly needs to have a specified current and debt ratio in its financial books to acquire the loan of 7.5 million from BDO finance. Therefore, the company could conduct fraudulent activities in its financial, report to acquire the relevant loans to support its activities. Moreover, the company mainly needs to keep the overall current ratio at the levels of 1.5, while the debt-to-equity ratio needs to be below 1, which is conveniently been maintained in the financial report of 2015. This mainly portrays the overall fraudulent activities, which could be conducted by the management to comply with the loan requirements. This could increase the material misstatement conducted in the financial report of DIPL (Sandberg et al, 2016). From the evaluation, relevant fraudulent activities that are present in operations of DIPL could be identified. The company can implement new system for monitoring the activities of the organisation, which could directly help in reducing the fraudulent activities, which is been conducted by the employees. Moreover, there are also relevant problems with the calculation of raw materials, where the organisation mainly uses the average costing method in its books. This average costing method is relevantly lower that the actual costs incurred by the organisation in purchasing the product. This method mainly reduces the capability of the organisation to determine the actual cost incurred from its operations. Moreover, the financial reporting process of the organisation also portrays different types of risk, which could be evaluated by the auditors during the audit procedure. 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