CASE STUDY Gordon Ltd stocks thousands of items that range in value from $1 to $100. The inventories on hand represent a material portion of current assets. The merchandise items change according to the season and the promotional theme adopted by the stores management for the year. Merchandise is ordered up to four months in advance from overseas suppliers. These orders require Gordon Ltd to give the suppliers substantial deposits upon placement of the orders.

Required

Identify the accounts that are at risk of material misstatement for Gordon Ltd? Explain why they are at risk.