Impact of business risk at Bower Ltd Bower Ltd

Bower Ltd is a manufacturer of replacement parts for agricultural equipment such as tractors and headers located in the Riverina region of NSW. Rival firms who use imported goods have been providing an increased level of competition in this industry, however Bower has been able to meet these competitive pressures by providing higher quality products relative to their competitors. Of late, Bower has invested in a new manufacturing process that was designed to keep high levels of quality while minimising manufacturing time and therefore costs. Disappointingly, there has been an increased number of returned goods from customers which can be linked to a possible reduction in manufacturing standards.

Question 1: The business risk impacts, and the accounts (as well as the related assertions) most likely affected by the increased competition and strategic decisions made by Bower Ltd, including justifications.