EXPLAIN WHY THE FACTORS IDENTIFIED IN (A) ABOVE ARE RELEVANT TO YOUR CALCULATION OF THE PRELIMINARY FIGURE FOR OVERALL MATERIALITY.
EXPLAIN WHY THE FACTORS IDENTIFIED IN (A) ABOVE ARE RELEVANT TO YOUR CALCULATION OF THE PRELIMINARY FIGURE FOR OVERALL MATERIALITY.HI6026 Audit, Assurance and Compliance TRIMESTER 3, 2017 INDIVIDUAL ASSIGNMENT 1Assessment Value: 20%Instructions: This assignment is to be submitted in accordance with assessment policy stated in the Subject Outline and Student Handbook. It is the responsibility of the student who is submitting the work, to ensure that the work is in fact her/his own work. Incorporating anothers work or ideas into ones own work without appropriate acknowledgement is an academic offence. Students should submit all assignments for plagiarism checking on Blackboard before final submission in the subject. For further details, please refer to the Subject Outline and Student Handbook. Answer all questions. Maximum marks available: 20 marks. Due date of submission: Week 6, Friday at 5.00 p.m.Case Study on Double Ink Printers Ltd (DIPL)Background InformationYou are a senior manager with Stewart and Kathy and you have been approached to undertake the audit of Double Ink Printers Ltd (DIPL). 2017DIPL print books, magazines and advertising materials for the publishing, educational and advertising industries on a print-ondemand basis. Printing on demand means that publishers can print the exact quantities ordered by retail outlets, rather than estimating in advance how many books are required and often printing too few or too many. The average printing turnaround time for DIPL is two business days for small orders and five to ten business days for large orders. In addition, five years ago, DIPL further expanded its earnings base by having publishers titles available as searchable e-books that could be downloaded directly by readers from DIPLs website.Purchase and InventoryDIPL purchases 50% of its inventory requirements of paper, ink and binding materials from Australian sources and 50% from Asian countries. When inventory received at DIPLs warehouse (whether it is purchased from Australia or Asia), the accounts payable clerk, Bill Jimmy, records the arrival of the inventory and also its value and quantity in the accounts payable system. Inventory is paid for the relevant currency of the country from which it is purchased. Raw materials have been valued at average cost and an allowance for inventory obsolescence has existed in previous years to cover the estimated decline in value from the effects of storage hazards. Work in progress is immaterial due to the quick turn- around time of printing jobs. Any work in progress is assessed at the cost of raw materials and labour and proportion of manufacturing overheads based on normal capacity. At year end, the warehouse is closed from 28 to 30 June for stocktake, so sales must be invoiced in the system by close of business on 27 June. The stock must have been sent to the customer (that is, it must either be on track, ship or plane on its way to the customer, or it must already have arrived at the customer; it must no longer be in DIPLs warehouse).Print on Demand revenue and receivablesEach time a publisher wants to add a book to DIPLs digital library (a server storing all of the publishers books in a digital format, ready to print), it emails the book to DIPL in PDF format. The digital library is backed up at the close of business every day, with the backup tapes kept off site. Once the book is stored in the digital library, the publishers can order copies to be printed as required.When the publishers confirm the order, the accounting system automatically retrieves details of the publishers credit record and stops any orders from publishers that have exceeded their credit terms and limits. A printout of the transactions history of the publishers is generated and must be signed by both Helena Keng, the head of publishing, and Jane Roger, the head of accounts at DIPL, before the order can continue, after the transaction history has been signed and dated, accounts receivable staff file it.
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