Please look at the attachment for reference of case study. Look up on google the appendix section for the Cloud 9 case study BOOK: Auditing a practical approach. Please elaborate on the attachment given; the attachment is the inherent risk of cloud 9. However, I need you to elaborate and paraphrase in your own words on the 3 Identification of inherent risk in cloud 9 Auditing. (300 words for each inherent risk).

a. Justify the risk assessment by stating whether the inherent risk is high/low/ medium due to? State How likely the risk can occur and why?

b. Explain the consequence of materiality. You don't need extra information to justify your opinion. Just elaborate more.

1. Growth of revenues given industry outlook and management incentive Consumer discretionary spending is low and expected to grow by only 2% for the year. Management receive bonuses based on revenue targets, which was set at 3%. General economic conditions will also impact retail businesses with their recoverability of debt and the valuation of This inherent risk is "High" and impacts the Sales - Occurrence, Accounts Receivable - valuation 2. Level of competition This inherent risk is "Medium" and impacts the Accounts Receivable- Existence and Valuation, Inventory - 2. Merchandise cycle and fashion trends Based on the stability of the athletic footwear market, this inherent risk 1S "Low" as the fashion trends are not as exaggerated as with other footwear 1. Growth of revenues given industry outlook and management incentive Consumer discretionary spending is low and expected to grow by only 2% for the year. Management receive bonuses based on revenue targets, which was set at 3%. General economic conditions will also impact retail businesses with their recoverability of debt and the valuation of This inherent risk is "High" and impacts the Sales - Occurrence, Accounts Receivable - valuation 2. Level of competition This inherent risk is "Medium" and impacts the Accounts Receivable- Existence and Valuation, Inventory - 2. Merchandise cycle and fashion trends Based on the stability of the athletic footwear market, this inherent risk 1S "Low" as the fashion trends are not as exaggerated as with other footwear