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(iii) During the year, WF's Managing Director of the past 10 years retired and a new Managing Director was appointed. The new Managing Director,
(iii) During the year, WF's Managing Director of the past 10 years retired and a new Managing Director was appointed. The new Managing Director, Sheldon Cooper, has previously worked as a Financial Controller in the fashion industry and is new to the forestry industry _ Soon after Sheldon was appointed as the Managing Director, IVF introduced bonuses for its sales staff to help achieve budgeted sales for the year. The bonuses are an increasmg percentage of the gross sales made, by each sales person, above certain monthly targets. WF does not currently have a strong system of credit limit checks for its customers in place. Required Prepare a memorandum to the Audit Manager, outlining your risk assessment relating to Wild Forest Limited based on the above situations and your recommendations on the audit approach to be used. (S Marks) For each ofthe above situations relating to Wild Forest Limited, answer the following: (a) Identify and discuss why the above situation represents a risk (b) By applying auditing knowledge, identify the main account or group of accounts affected by this risk in the audit plan. (c) Identify how the audit plan will be affected by the risks and recommend specific
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