(b) You are the audit manager for Parker, a limited liability company which sells books, CDs, DVDs and similar items via two divisions: mail order and on-line ordering on the Internet. Parker is a new audit client. You are commencing the planning of the audit for the year ended 31 May 20X7. An initial meeting with the directors has provided the information below. The company's turnover is in excess of R85 million with net profits of R4 million. All profits are currently earned in the mail order division, although the Internet division is expected to return a small net profit next year. Turnover is growing at the rate of 20% pa Net profit has remained almost the same for the last four years. In the next year, the directors plan to expand the range of goods sold through the Internet division to include toys, garden furniture and fashion clothes. The directors believe that when one product has been sold on the Internet, then any other product can be as well. The accounting system to record sales by the mail order division is relatively old. It relies on extensive manual input to transfer orders received in the post onto Parker's computer systems. Recently errors have been known to occur, in the input of orders, and in the invoicing of goods following dispatch. The directors maintain that the accounting system produces materially correct figures and they cannot waste time in identifying relatively minor errors. The company accountant, who is not qualified and was appointed because he is a personal friend of the directors, agrees with this view. The directors estimate that their expansion plans will require a bank loan of approximately R30 million, partly to finance the enhanced web site but also to provide working capital to increase inventory levels. A meeting with the bank has been scheduled for three months after the year end. The directors expect an auditor's report with an unmodified audit opinion to be signed prior to this time. Required Identify and describe the matters that give rise to audit risks associated with Parker. (12