CASES 2.1 For the following cases: Identify factors that may indicate an increase in job risk in the current year. FOREST FABRICATING INC. It manufactures a one-of-a-kind computerized machine for cutting trees, which combines several logging process steps into one efficiently automated process. This has a considerable commercial value for logging companies. In the first year of FOREST operation FABRICATING has produced and sold eight machines, including the original prototypes. Each machine sells for approximately $ 60,000 and is warranted for two years. The gross profit margin is unusually high (around 40 percent) due to the major equipment manufacturers so far they have not been able to offer a comparable product. The inventor of the machine is a significant shareholder of FOREST FABRICATING, but is no longer actively in business. He receives a royalty on the machine sold, but the company defer payment of his royalties so that don't have to pay taxes on them. As you start the fieldwork for the current year's audit, you discover the following: - The directors have opened negotiations with a consortium of private investors. The consortium, associated with the inventor, plans to acquire a controlling interest in the company, provide financing for a major expansion and, finally, take the company public.