Here are 4 (four) factors that cause risk:

1. The client does not have enough working capital to continue operations

2. The client fails to detect theft of inventory from the warehouse by employees because of access

entering unrestricted warehouses and clients not reconciling existing inventory with

the amount recorded in a timely manner.

3. Based on business scale and market share, clients are one of the biggest in the industry

4. The client does not reconcile the bank account with the recorded cash balance

Choose from the following risk components that most relate to each risk factor

above, and provide an explanation:

a. Acceptable audit risk

b. Inherent risk

c. Control risk

d. Risk detection planned