Audit report

Topics: Auditing, Audit, Financial audit Pages: 25 (6261 words) Published: November 10, 2013

1. Carry out a background research on your proposed client and obtain as much information as possible about your client in particular and about the market sector which your client operates in. ASOS originates from or is an abbreviation for “As Seen on Screen” indicating its method of operating business in other words online retailing. It was founded by Nick Robertson and his business partner Quentin Griffiths and it was incorporated in 2000 by its current Chief Executive Officer Nick Robertson and Quentin Griffiths. Its headquarters are in Greater London House in London and has about 441 employees excluding the logistics team which is currently outsourced. It also has offices in Ireland, France and USA. On the 6th of October 2001 ASOS plc was enlisted on the London Stock Exchange under the Alternative Investment Market. ASOS plc is one of the UK’s largest online fashion and beauty retailer offering over 35 000 branded and own label fashion lines across womenswear, menswear, footwear, childrenswear, accessories, jewellery and beauty with over 1500 new product lines introduced each week. It targets the fashion cautious 16-34year olds and it attracts approximately 5.8million unique visitors to its website with 1.2million active customers. With a high sales turnover Asos is rapidly becoming a market leader in online retailing. 80.5% of its turnover is generated in the UK, and the remainder of it throughout the rest of the world. Its turnover has shown a rapid growth with sales almost doubling year by year for instance 2008 revenue was £81.4m while 2009 was £165.4m. A. What is Asos all about?

Over the past seven years Asos has generated new ideas that have proven successful and managed to set trends within the industry for instance it was the first UK online store to launch a catwalk in 2007. In addition Asos operates a blog or forum called Asos life on its websites were online shopping members even employees can communicate ideas and voice out suggestions in a bid to make online shopping a social experience. Moreover Asos has taken advantage of social networks such as Facebook and Twitter and uses them as marketing tools. Though ASOS was primarily aimed at 16-34 year olds it has evolved significantly by recently launching a new clothing line in 2009 Called Little ASOS which caters for babies and 2-6 year old boys and girls offering them high brand labels such as Tommy Hilfiger and diesel. On its website ASOS also operates ASOS outlet which sells previous season fashion at discounts up to 75%. B. Geographical spread and Subsidiaries

As mentioned before the company is geographically spread and has overseas operations shipping to 58 countries which account for 19% of its sales (, 2010). Their major focus of business is European markets with greater presence in Ireland, Denmark, Sweden, France and the US. ASOS has four subsidiaries listed in the table below:

Table 1: ASOS Subsidiaries
Name of Company
Percentage Limited
Entertainment Marketing (UK) Limited
Brindle Limited
Crooked Tongues Limited
50% Limited undertakes its principal activity of internet retailing in Hemel Hempstead operating as the main distribution centre and warehouse. Crooked Tongues Ltd specialises in trainers and sneakers which will advance the company’s growth in that market. Entertainment Marketing (UK) Ltd is mainly there to prop up the marketing strategies of ASOS plc and its reputation. C. Board of directors and committees

Asos plc currently has 9 members on its Board of Directors, most of them operating as functional executives though the others are concerned with administration, investment and Human resources as shown in table two below. Two members are non-executive directors. Its remuneration committee consists of two main members, Karen Jones and Peter Williams of which the latter is also the Chairman. The committee meets as required during the year and determines the...
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