During the audit planning of Rainbow Ltd, a manufacturer of miniature water fountains, the audit team highlighted the following matters:

1. The audit partner wishes to place greater reliance on the. control structure of non-current assets, arguing that the control risk assessment can be decreased from medium to low if adequate control testing is performed.

2. Your client has warehouses in both Sydney and Melbourne. In the previous year the audit team attended a stocktake at only the Sydney warehouse. One substantive stocktake procedure involved a selection of fifty items from the inventory report. Three errors were identified and projected over the whole population. This year the manager has suggested testing both sites.

3. A number of stock cut-off errors were noted in the previous year. The planning process has identified that this may be an issue this year.

4. Even though the value has remained constant, the number of debtors' accounts has doubled from 800 to 1600 in the last year.

Required

Discuss the effect of each.