Background summary: Manikin Ltd, a company listed on the NZ stock exchange, is a new audit client. The company is a wholesale distributor of various consumer goods operating in various countries. Goods are distributed through a number of sales channels ranging from small business to large enterprises and government organisations. The company also distributes through a number of strategic partnerships with alliance partners. Financial year end is 31 December 2021.Sales data is for the last two financial years and has been extracted from the company's billing and inventory system. The purpose of this file is to assist you with the audit planning process and for you to gain an understanding of sales make up, trends, profile and performance. The data will also assist you to identify potential risks that could lead to material misstatements in the financial statements, specifically also the consideration and identification of the mandatory presumed Fraud Risk for Revenue per ISA 240. Additional information: 1. At your first visit to this client, Nastasja Toi, the senior accountant at Manikin Ltd has asked that your firm advise her on some complex matters relating to the preparation of the financial statements while there for the audit; 2. Nastasja Toi also introduced you to Michael Angelo, explaining that he is the Managing Director and Chairman of Chairman of both Manikin Ltd's Board of Directors and Audit Committee. 3. While talking to Michael Angelo, he asked whether you could clarify if a company he was dealing with was required to have an audit. The company concerned is owned by a consortium of fifteen wealthy investors, all of whom are New Zealand citizens and has annual revenues of around NZ $50 million. 4. As part of understanding this client and its environment, your audit manager, Blac Azia, has asked you to identify what you believe to be the one (1) most important factor for Manikin Ltd at each of: Economy level; Industry level and Entity level. 5. Blac Asia has also asked you to identify what you believe are the most likely risks of fraud for this particular client, so that these can be used as examples of what to be alert for when briefing the audit team before the main audit effort starts.

Blac has further clarified that she wants jus one example of each of: a. Fraudulent financial reporting; b. Misappropriation of assets.