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How do the following statements affect the control risk, inherent risk, detection risk, RMM? Explain why? IR/CR yes or no? RMM and DR increase,decrease or
How do the following statements affect the control risk, inherent risk, detection risk, RMM? Explain why? IR/CR yes or no? RMM and DR increase,decrease or no effect?
| Factor | IR Factor | CR Factor | Why? Comments | Impact on RMM | Impact on DR |
1 | Apollo advanced $1.25 million to Larry Lancasters secretary. | |||||
2 | Apollo does not have adequate documentation supporting customer returns of product. | |||||
3 | Apollo has maintained a positive trend in net income over the past several years, and has a strategic emphasis on meeting profitability targets. | |||||
4 | Apollo has not allowed your firm to speak with the predecessor auditor about their withdrawal after last years engagement. | |||||
5 | Apollo installed a new computer system mid-year. |
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