For each item, state the following

a. Which component of the Audit Risk Model most impacted by the info

b. Does it make the risk "higher", "lower", or "no change"

1. The company is a large private company but will be using these audited financial statements to "go public" and start to sell shares on the stock exchange.

2. The company has entered into a number of complex financial derivative transactions and they have been having difficulty in determining the appropriate inventory obsolesce balance to record.

3. The auditor is concerned about this years audit as he recalls that there were a number of material errors that his audit team identified as part of last years audit.

4. During the planning stage of the audit, your firm has noted that the company has reduced the number of management. As a result, some of the previous management review and approvals have been streamlined or eliminated this year.