Please decide control risk, inherent risk and planned audit evidence will be affected (increase or decrease) in the following cases, and then list your analysis:

i. You determine through analytical procedures that working capital, debt to equity ratio and other indicators of financial stability have worsened during the year.

ii. In auditing inventories, you obtain an understanding of the internal control structure and perform test of controls. You find it significantly improved compared with that of the preceding year. You also observe that due to technology changes in the industry, the clients inventories may be somewhat obsolete.