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Part A Report – case 25%

  1. You are to undertake the analysis because you are familiar with the industry in which the firm is situated and your fellow seniors believe this will give you an advantage when uncovering the inherent risks of the new client. Your fellow seniors look forward to reading your report. After you have given your report to the other seniors, they decide that your team will be handling the audit.
  2. Remember to describe your industry and the firm to which the report relates. All sections should refer to the appropriate standards, and standard paragraphs. The standards should be integrated into the document in a cohesive way.
  3. Evaluate the internal control environment of the company to the extent possible using publicly available information and your analytical review.
  4. You should use an appropriate format for the report. A letter of transmittal is not required. The more concisely you can present your results the higher will be your mark.




Woolworths is Australia based store. The grocery store or say supermarket founded in 1924 by the group of Woolworths. In today’s time, Woolworths is known as the biggest and popular supermarket or grocery store in Australia. It has approx shares of 33% till 2019. Woolworths store includes so many products like groceries in which it sells fruits, vegetables, packaged food, meats, etc. It also some more products like DVDs, magazines, household products, beauty products, baby and pet supplies, and stationery. There were already 97 Woolworth’s stores till the end of June 2020. It also has its own Woolworths Metro convenience stores which are around 64 in number. The facility of the door to door is also available as there is an online platform for Woolworths to buy online by just ‘click and collect’ and home delivery services available. 

Company’s business:

The group of Woolworths has been considered as a most wanted brand and have some most trusted Australia’s brand. The store always gives its best experience and service to all over the world (wherever they have their supermarkets). The limited group has divided its business into four divisions, those are- New Zealand Food, Endeavour Group, Australian Food, and Portfolio.

  1. New Zealand Food- The New Zealand flagship of Woolworth store has a huge chain. It provides full-service concession in around 184 supermarkets. The stores are widely expanded in New Zealand covering its North and South Islands. It has a franchise with FreshChoice and SuperValue stores. FreshChoice provides full service in the store and SuperValue provides uses to the store (Woolworths Group, 2021). It also provides door-to-door service to the people.
  2. Endeavour Group- Endeavour Group includes hospitality and liquor assets. It has collaborated with the group of Bruce Mathieson. It is currently holding 85.4% shares of the group of Woolworths. The retailer for its wine is named Langton. The supermarkets of the company have a particular liquor store known a BWS that is Beer Wine Spirits. It also provides wines online through Cellarmasters (Woolworths Group, 2021). Lastly, it also collaborates with the Australian Leisure and Hospitality Group as it is famous for its hotel and poker machine operators (Woolworths Group, 2021).
  3. Australian Food- This refers to Woolworth’s primary supermarket. The reason is that it is Australian based and it operates every Australian state and territory. The store is using the slogan ‘The Fresh Food People’ from 1987 till now. It is also known as Woolies store. It is not only the primary supermarket for Woolworth but it also provides an online platform for Woolworth. It is an online supermarket that allows customer door-to-door service (Woolworths Group, 2021). They provide zero risks of quality as the groceries are packed in some extra special storehouses which are located all over the country. It also provides very kind service for the people who lived in Inner-urban (Woolworths Group, 2021). There are supermarkets that are situated in the main metropolitan areas so that they can provide some fresh and pre-prepared meals to the poor customers (Woolworths Group, 2021).
  4. Portfolio- There are some additional services provided by the groups of Woolworths. Big W is a department store chain for discounts. It helps in selling usual goods in a very good and wide range. Also, there is a cosmetics retailer shop that provides cosmetics online. The name is Adore Beauty and is located in Melbourne, Australia.


Woolworths Group Limited provides retail-based operations. The main aim of the company is to provide the general goods and services to the customers, customer stores and supermarkets. The industry provides so many different products, foods, and liquors. It also provides services in the hotels that contain food, pubs, gaming operations, and also accommodation (Arli, et. al., 2013). The groups of Woolworths have a wide range of customers especially in Australia and New Zealand (Dearham, 2004).


The group of Woolworths has adopted the circular way of economy. They have used the methods of food waste, packaging, microbeads, and plastic bags. The group of Woolworths trying to operate as in zero food waste that has been circulated from the landfill. This may help in the reduction of losses in stocks (Van Kampen and Kirkham, 2020). It also helps in improving effective programs for farmers and for the food rescue and also improvement in the pattern of the management of store waste.

Then, coming on the next step that is the packaging. It is the responsibility of the group Woolworths to shield up their customers from the environment by doing recycling. The packaging is done by recycling. Therefore, the company has the goal to improve the packaging of their brand by doing recycling only and should grant to the economy in a circular way. Woolworths will use environmentally friendly packaging (Van Kampen and Kirkham, 2020).

Third, microbeads are known as plastic particles that do not break down and solvate in H2O that is water. It has tiny and rigid plastic particles. The most important thing is that Woolworths do not have microbeads in its products (Arli, et. al., 2013).

Lastly coming on the plastic bags, as is mentioned above that there will be a reduction in the plastic bags that means the group of Woolworths has removed single use of plastic bags from the areas like Australia and New Zealand. This includes all the agencies that are Big W, Countdown, Woolworths Supermarkets, and Metro stores, BWS, Cellarmasters, and Dan Murphy’s. 

Business Risk:

The group of Woolworths has a complex way of business. The span of risk consists of planning, operational, and financial, and consent related to the online and retailing market. The group of Woolworths has a framework of risk management that manages the venture or risk with the corporate governance (Arli, et. al., 2013).  The business risk consists:

  1. Strategic- The retail environment of the business needs to be competitive. There should be new strategies and plans for new decisions and technologies that should be taken under consideration of the demands of the customers. They should meet customers’ wants and expectations and some internal and external risks (Arli, et. al., 2013). These factors are lead to success and to fight with the competitors in the market and should adopt the changing surroundings and marketplace. This has a major impact on the business performance and market share (Bank, 2021).
  2. Financial- For the growth of the business and its operations, it is necessary to have the availability of funding and management of liquidity and funds which are important. The changes in the foreign exchange rate and interest rate can easily affect the income of the business (Bank, 2021).
  3. Operational- The group of Woolworths has been driven to operational risk. The reason for failure in meeting people, security, data breaches, IT leads to the weather conditions, natural disasters, cyber-attacks, and industrial disputes (Ngwakwe, 2021).
  4. Compliance- The group of Woolworths has some rules and regulations, laws, and agreements that lead to some judicial changes. It can also give some false impact on the goodwill and income of the group which results in significant disadvantages and fines.  

Analytical Review:

An analytical review is a procedure for auditing that is basically based on ratios. The ratios depend on the accounts and identifying the changes. There is a limited review for all the services as it provides a guarantee to the parties who are interested in the financial information (Woolworths Group, 2021). The group of Woolworths limited’s finance consists of Profit and loss account and Balance Sheet as well as Number of Share on Issue, Number of Employees, Earnings per share, and Market Capitalization.

Now, coming on to the present situation of the world that is a coronavirus. Covid-19 had a great impact on the business all over the world. The group of Woolworths ‘ financial performance also gets affected by the coronavirus in F20 (Woolworths Group, 2021). After the impact on the half financial performance, it affects the other half of the company that is the EBIT growth by closing down the hotels. But the effect of closing down the hotels leads to the retail business which helps in more consumer growth and has some safety tips with the team.

The above photo shows the analysis or says a review of the sales, group inline sales, EBIT, gross profit, and many more of the year 2020. Before crucial events, Focal Overheads of $151 million were in line with previous trends. In comparison to F19, the increment reflects a $50 million oddball installment from Caltex and a $37 million hindrance inversion on a property that was so allocated which is applicable within the earlier year (Annual Report, 2019).

The recurrence of salaried colleague remediation has risen that have focal overheads by $2 million in the year. Nonetheless, H1 F19 focal overheads were rehashed by $26 million for in-year costs related to the half, and H2 F19 focal overheads repeated by $24 million that has been acquired. The increment in H2 F19 was because of the insulations of a $50 million arrangement that has been in recent times getting reserved in H2 F19. It mostly gets balanced by the H2 in-year expenses of $26 million. For F21, focal overheads are relied upon to be roughly and inappropriately $160 million with some more interest. It was in some hazard, coach, and consistence assets in F21 so that it may help the target of the salaried colleague remediation and higher protection costs.

Concern on Audit Risk:

The committee of the Woolworths framework is the Audit, Compliance Committee, and Risk Management. This helps in fulfilling the responsibilities, aim, power, work, and composition of the Board of the Committee. So, the role of the committee is to give guidance and encouragement to the government on the basis of the board of the company. It includes risk management and some control systems that have been operated internally. There are some other accounting practices and policies, systems, audit functions operated externally and internally, and lastly reports of finance of the company Woolworths (Annual Report, 2020).

There have been lots of Audit risks but risk management is also important as the policies of Woolworths will help the company to identify the material risks. There should be an appropriate process for risk management so that it would be easy to address them. Now, the proper and effective operations, accounts, and management lead to adequate controls for the company. Then, the concern on the constant planning of the business process can help in the business plans to be in place only (Luiz, et. al., 2011). The company should adopt the business and economic environment changes which include the demands, trends, and some more factors that would help Woolworth to have some relevant risk profile (Annual Report, 2020).

The company’s risk should be reviewed as it helps the company to fight fraud. It also helps in the execution of organization and specialty unit hazard the executive’s plans (Bowen and Luiz, 2009). Also, Survey protection and elective danger have some move game plans that should be achieved.


Woolworths has very successfully been able to renowned themselves as they have set very high criteria for their producing the goods to the retailers of the company which is only possible with the help of the good service which has been provided by the company’s staff. Woolworths has a very large array of products which requires a proper inventory to be able to manage the distribution and handling of the products by the company (Luiz, et. al., 2011). Woolworths is an up and coming supermarket store that has the supply of products coming in from various sellers sending their product to Woolworths and due to the management problem and the rapid growth the inventory management is not so efficient currently that leads to various products being dumped by the company as they have passed their expiration date and can not be used hence are thrown away (Annual Report, 2020).


Intangibles assets are the kind of assets that can not be seen or felt physically or can be touched but they are present but could be physically seen or they are not tangible, they include assets like the copyright or the trade secrets or patents filed by the company (Woolworths Group, 2021). If the company gets those assets at a cost higher than that of its book value then it will carry forward goodwill on the company’s balance sheet. The intangible assets that the Woolworths company had for a quarter that finished in the month of December 2020 was around the figures of 5,828 million dollars the company (Annual Report, 2020). This kind of asset can not be measured physically but provides a great deal of profits to the company.

Fixed Assets:

Fixed assets are the kind of assets that have been purchased by the company for a very long term and are used by the company to be able to manufacture the goods and provide the services. Woolworths also has a considerable amount of the fixed assets in June for 2020 The fixed assets of the company were measured around the figures of 8,000 million dollars (Raghuram and Kuberkar, 2008). They are used by the company for the long run that helps them to be able to run their day-to-day activities without much trouble (Annual Report, 2020).

Foreign Exchange Transaction:

A foreign exchange transaction is a type of transaction that takes place between the currency of two different countries using the different currency. At Woolworths, the foreign exchange transactions are been converted into the sterling with the help of the exchange rate privileges that depend upon the date when the transaction took place (Manjimup, 2021). The net loss and profit caused by the foreign exchange transaction are then used by the company to be able to create an exchange rate of the monetary assets and liabilities at the end of each year the are noted as the foreign currency are then showcased in the income statement of the company the expenses are translated at the rate on the dates of the transactions and all resulting exchange differences are considered as a separate component of equity (Raghuram and Kuberkar, 2008).

Control risks:

Control risks also known as the internal control risks are the type of risk which the internal control was not able to check hence the name internal control risk that could cause the wrong or produce the incorrect financial statement of the company (Raghuram and Kuberkar, 2008). Woolworth’s internal committee of the control risk is the one that plays the major role for the company in handling the audit committee as the control risk could create major problems for the company as it impacts the financial statement of the company (Raghuram and Kuberkar, 2008). The internal audit done at Woolworths helps the company’s higher management and the board members of the company a and independent reassurance of the internal control environment of the company. 

Corporate Governance:

Corporate governance is a series of rules or regulations, processes, or laws that a company operates and is supervised or controlled, that is they are the set of rules followed by the company and they are being checked by the governing bodies whether they have been followed or not (Manjimup, 2021). The term includes internal and external factors that affect the interests of the company’s stakeholders (including shareholders, customers, suppliers, government regulators, and management). The structure and practices of the Woolworths Group are described in many important guidelines and documents. The following is a summary of these documents and guidelines, as well as copies of the documents, guidelines, and graphics. Woolworths Group publishes a corporate governance statement every year, which clarifies the corporate governance principles adopted by the board of directors and details the work of the previous.

Impact on Audit Testing:

The preparation of the report is one of the very critical parts for the organization because it shows the exact value of the company. Accountants and auditors are responsible for preparing the company’s financial statements. The annual financial statements provide important data for the company’s stakeholders. The annual financial statements can be used to determine the liquidity and efficiency of the organization. When the organization conducts the audit process, the auditor can use the term “audit participation” (Kasanagottu and Bhattacharya, 2018). The auditor shall follow the instructions and procedures when conducting the audit. The test paper is an exam conducted by the auditor. The review includes the different stages of the organization in the plan. , Site visit or foundation, proof test, and completion or withdrawal. Internal factors may have a significant impact on Woolworths’ inspection process. The government is changing its rules and regulations, which could have a significant impact on the examination. Auditors and auditors must abide by rules, regulations, and standards when preparing financial statements (Kasanagottu and Bhattacharya, 2018). The change in pricing policy means a change in the way the financial statements are prepared. Auditors are obliged to provide fair annual financial statements to all parties involved. The annual financial statement should provide sufficient information to stakeholders and display it in the financial report.


The group of Woolworths has the main goal to build up a kingdom of supermarkets. It means that it is known as one of the strongest economies all over the world. The strategy of the business is to provide the most common and daily usable products at a very good price for all kinds of consumers. Their main goal is not to provide good quality products in the beginning but also aim to provide a good experience today consumers for long lasting loyalty. From all the above discussions and the analysis, it is known that the main objectives of the company are:

  1. All the products at a good price
    1. Providing the best quality of the products
    1. Providing the most suitable quantity
    1. The expansion of the stores so that it can reach each and every person of the world as much as possible
    1. lastly a good experience of the sales in the stores and also in the online platforms.

In the end, the group of Woolworths has a very attractive slogan that is ‘fresh food people. it clearly states that the main objective of the company is to provide fresh food people that means with the highest quality quantity price and with very good experience. also, the company has a very motivating financial report in 2019. Even after challenging the difficulties in the first half, the group has delivered an unbelievable growth of about 3.4 % and 5.0 % in the year. The mathematics of the company states that the financial planning of the company and also the length and the dedication will explain its business further not only in the foreign countries but also in therein in the Indian market. It will always create a good bond with the consumers or the citizens of all over the world as it dries the very good experience to their customers.


  • Van Kampen, T. and Kirkham, R., 2020. Assessment of the Supermarkets and Grocery Stores Sector in Australia: A Case Study of Woolworths and Coles using DEA and VAIC™. Journal of New Business Ideas & Trends18(1).
  • Kasanagottu, S. and Bhattacharya, S., 2018. A Review of Metro, Target, & Woolworths Global Business Strategy. International Journal of Mechanical Engineering and Technology9(7).
  • Manjimup, B., 2021. Woolworths to separate drinks and hospitality arm.
  • Keith, S., 2012. Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal of Regional Food Studies2, pp.47-81.
  • Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business, & Accountancy Ventura16(1).
  • Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and changing environment of business.
  • Raghuram, G. and Kuberkar, G., 2008. Woolworths Limited, Australia.
  • Woolworths Group, 2021. About Us. Retrieved from:
  • Annual Report, 2019. Woolworths Group. Retrieved from:
  • Luiz, J., Bowen, A. and Beswick, C., 2011. Woolworths South Africa: making sustainability sustainable. Emerald Emerging Markets Case Studies.
  • Bank, C., 2021. Competitive Strategy: Woolworths Limited.
  • Bowen, A. and Luiz, J.D.S., 2009. Woolworths SA: Making Sustainability Sustainable.
  • Annual Report, 2020. Woolworths Group. Retrieved from:


Balance Sheet

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