Question $2$business and risk $(5\%)$

You are a newly promoted audit director with Hornidge, Reed and Flack $($HRF$).$ One of your new audit clients is Strategic Shield International $($SSI$).$ Based in Wagga Wagga, SSI is a world leader in the design and development of armoured vehicles, protective gear, surveillance systems, and cyber warfare solutions for defence agencies in Australia, the United Kingdom and the United States.

Just over three months ago, SSI took decisive action to terminate its chief finance officer $($CFO$).$ He had been collaborating with several Australian Department of Defence staff to submit inflated consulting invoices and siphon funds received to a personal bank account on the UK island of Jersey. The CFO, who had privileged access to the client billing system, exceeded his authority by manipulating the costs associated with the cyber warfare project, Cipher Guard.

The fraudulent activities were only brought to light when SSI$$s procurement manager overheard the CFO discussing the 'scheme' with one of his defence department collaborators at the local squash courts.

Required

With reference to ASA $240$:

advise your audit partner, Hannah French, on the business risk impact of the CFO$$s conduct; and

identify the accounts, as well as the related audit assertions most likely affected, and the additional audit work $($if any$)$ HRF should consequently undertake.