Auditing risks

Expected Level Scenario Type of Risk Level of Risk of Audit Work Justification Jupiter Mining Ore Limited opened a new mining operation in on Morag, a planet in the Rings Galaxy. The new operations will account for 10% of the firm's operations for the year. Being in a distant galaxy the company had to hire local staff. Unfortunately, few in the galaxy have accounting experience. Only one senior accountant accepted the offer to transfer to the Rings Galaxy to train new staff. Mining operations require major capital expenditure; thus, there are major barriers to entry. Hence, many mining operations are mature firms with constant relationships. Sales transactions require substantial estimations and involve the use of complex financial instruments. The great number and magnitude of sales by Jupiter Mining Ore Limited are a further complicating factor. The new changes to the method and requirements for estimating mining ore sales required Bad Eyesight Audits to redesign and recode auditing software used in the audit evidence gathering and evaluation process of mining sales. It also required audit team members to undergo new training and certification in understanding mining sales