1 Executive Summary: This is the report which is related to
auditing planning of the Dominos pizza company. As we are senior auditor of the
BG partners our report is related to the different stages of the planning,
understanding of the business, taking new clients, risk assessment, analytical
procedure and tests of control of the financial statement of dominos
Further it also explores the various types of the audit risk (ASA
200) like general risk and inherent risk. It also focusses the product quality
as well as try to minimise the misstatements. We also explain the food and
safety related to this company as a view point of auditor. Auditor team has suggested
the importance of the test of control in the financial statements.
2 Introduction: Dominos is the biggest pizza chain
in the Australia as well as it the biggest franchisee dominos pizza brand in
the world. It is listed in Australian Stock Exchange (ASX) in med 2005. It is
also known as sixth largest fast food chain restaurant in the world. Dominos
pizza was founded in the 1960’s in the united states. In the begging 1973
dominos used to made pizza with in 30 minutes otherwise they used to give them
free. People can place order by phone, online as well as they have digital
offer so on.
3 Stages of planning
3.1 Accept new client
and perform initial audit planning (ASA 300): The main objective of this report is to figure out
the risk related to the financial statement of the business company before accepting
the new clients and planning for the audit report. This is very important
decision for the auditor it is belongs to the auditor reputation.
So, before accepting the dominos company we have analysis
their annual financial statement of dominos company. Also, we have to
investigate owners and business activities how it is going on. Here we have
already viewed the financial statements of 2017 of the dominos pizza, so we
accept the company for audit test.
Strategy: The basic
concept of ASA 300 of the audit plan it also develops the risk of material
Our clients the retail business where they produce goods for
the consumer satisfaction. They have various risk factors such as misstatements
of inventory levels, manufacturing of the good, sales record quality of the
products at certain period of time (Arens,Best,Shailer,Fiedler,Elder,Beasley2012).
3.2 Understanding client’s
industry and business (ASA 315)
As a senior auditor our main responsibility is to be very
careful during period of engagement with new client. We have to understand
client’s business and their owners and how management going on. Our company is
a dominos pizza its like a restaurant which sells different flavour of the
pizzas according to customers choice. Dominos have online delivery
services. The first dominos open in
Australia was in 1983 in springwood, Queensland. They have stores in seven
counties of the world. Now they have 600 stores in Australia.
Our client has improved his quality and customers are
increasing ratio. Domino’s future plan is to increase double of stores in the
3.3 Risk assessment: The topic Risk assessment is not the
new topic in audit planning. Risk assessment always focus on the risk of the
material misstatement. There may be various types of risk which play vital role
during the period of audit engagement with new clients. So, as auditor its our
duty to investigate it. Model of audit risk = inherent risk x
control risk x detection risk.
3.3.1 General risk: DMP is the Australian Securities
Exchange code of Dominos Enterprises which is a locally owned public listed
company which has various transaction share price at ASX ups and down related
to general risk. Our clients case is related to price of the pizza according to
the customer. This kind of risk for our clients can be caused by the market
competition, demand of customers, choice of customers, product price, exchange
rate according to annual report 2017.
3.3.2 Business risk: Dominos Itself is a very popular
ASX companies but according to the view point of business risk domino’s is just
a food item. From other point pizza is not a good food even our client’s dominos
are reducing fat item and making good quality to reduce calorie of pizza.
Furthermore, clients have various types of risk like hazardous equipment,
various types of cutter, electrical items so on (health and safety management).
Dominos management is very strong, and business is running without net debt
(annual report 2017).