Hashim Energy is considerably more profitable than many of its competitors, largely due to its exten sive investment in information technologies used in its energy distribution and other key business Additionally, Hashim Energy expanded its investments into speculative markets and is also making processes. Recent growth into rural markets, however, has placed some strain on 2012 operations. several highly experienced accountants within its financial reporting team. Internal audit, which has the complexities of the underlying accounting associated with these activities, Hashim Energy added greater use of derivative and hedging transactions to mitigate some of its investment risks. Because of direct reporting responsibility to the audit committee, is also actively involved in reviewing key ac counting assumptions and estimates on a quarterly basis. Wira's discussions with the predecessor auditor revealed that the client has experienced some difficulty in correctly tracking existing property, plant, and equipment items. This largely involves equipment located at its multiple energy production facilities. During the recent year, Henderson acquired a regional electric company, which expanded the number of energy production facilities. Whitehead plans to staff the audit engagement with several members of the firm who have experience in auditing energy and public companies. The extent of partner review of key accounts will be extensive. Based on the above information, identify factors that affect the risk of material misstatement in the December 31, 2012 financial statements of Hashim Energy. Indicate whether the factor increases or decreases the risk of material misstatement. Also, identify which audit risk model component is af- fected by the factor. Use the format below: Factor Henderson is a new client Effect on the Risk of Material Misstatement Increases Audit Risk Model Component Inherent risk