Audit Plan for Dollarama
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| Our firm - Chiu & Weisserman LLP has been appointed as the new auditor of the public company Dollarama Inc. for the current fiscal year-end as at January 29, 2012. Please find in the following pages a report on the audit plan that was used to conduct our audit for the year ended January 29, 2012. Even though the audit of 2012 was performed by PWC, the assumption used for this project was that our firm was the new auditor for 2012.
Please do not hesitate to contact us if you have any questions.
Yours Sincerely,
June 12th, 2012
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Table of Contents
PART ONE - THE ENVIRONMENT 4-7
PART TWO - THE COMPANY 8-10
PART THREE - THE AUDIT PLAN 11-47
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PART ONE
The Environment
An attractive method used to obtain an understanding of the client’s position in the industry is through an analysis of the Porter’s five forces model of competition. It is based on five forces that determine the competitiveness and the attractiveness of a market. Attractiveness refers to the context of profitability. An attractive industry is one in which a company’s overall profitability is rising and as such, three of the five Porter’s forces are external and the other two are internal. Thus, by analyzing the industry Dollarama is operating in, we can achieve both an understanding of the industry and its position within this industry as well as assess the inherent risk of the company.
1. Threats of new competition
An industry that is profitable will definitely attract new entrants. This will eventually lead to a decrease in profitability for all firms that are currently operating in
| Our firm - Chiu & Weisserman LLP has been appointed as the new auditor of the public company Dollarama Inc. for the current fiscal year-end as at January 29, 2012. Please find in the following pages a report on the audit plan that was used to conduct our audit for the year ended January 29, 2012. Even though the audit of 2012 was performed by PWC, the assumption used for this project was that our firm was the new auditor for 2012.
Please do not hesitate to contact us if you have any questions.
Yours Sincerely,
June 12th, 2012
_________________
_________________
_________________
_________________
_________________
Table of Contents
PART ONE - THE ENVIRONMENT 4-7
PART TWO - THE COMPANY 8-10
PART THREE - THE AUDIT PLAN 11-47
[pic]
PART ONE
The Environment
An attractive method used to obtain an understanding of the client’s position in the industry is through an analysis of the Porter’s five forces model of competition. It is based on five forces that determine the competitiveness and the attractiveness of a market. Attractiveness refers to the context of profitability. An attractive industry is one in which a company’s overall profitability is rising and as such, three of the five Porter’s forces are external and the other two are internal. Thus, by analyzing the industry Dollarama is operating in, we can achieve both an understanding of the industry and its position within this industry as well as assess the inherent risk of the company.
1. Threats of new competition
An industry that is profitable will definitely attract new entrants. This will eventually lead to a decrease in profitability for all firms that are currently operating in
References: Dollarama web site. (June 2012). About Dollarama, Retrieved from http://www.dollarama.com/about_us/ John Daly Marowits, A. (April 11,2012). Dollarama to add up 60 stores as it ramps up competition with Dollar Tree. Retrieved from http://www.oldsalbertan.ca/ Zellers LaSalle, L. (June 28, 2011). Dollarama faces competition from U.S. retailers for consumers’ buck. Retrieved from http://www.canadianbusiness.com/ McGraw Hill