LLL Avionics Ltd. has contacted your accounting firm to inquire about the cost of an external auditor. The company president explained that he feels that " the previous auditor charged too much and only issued a qualified opinion. As the partner in charge of his file, you interviewed the president and controller of the company as part of your decision to accept or reject LLL as a client. You have found that the company has a few design for an aircraft and plans to borrow funds from the bank and to issue common shares to finance prototype plane test the design. The new funds will also greatly improve the company's existing bank loan up to date. If the design is successful, more common shares will issued for more capital.

The controller was very helpful in your discussions, and you note his high level of enthusiasm for the project as this is his first job at this level. However, the president was not so helpful and seemed annoyed with your questions.

Indicate 5 factores in the above situation that impact the risk of material misstatement and explain your answer.