Question 4. Mayfield Ltd tests of detail (4%)

Mayfield Ltd (Mayfield) manufactures satellite navigation systems designed for use in passenger vehicles and exports these exclusively to car manufacturers in South Korea and Japan. MCA has audited Mayfield since its incorporation five years ago. During this entire period, Mayfield has received unqualified audit reports and there have been no identified issues of audit significance. A review of the audit plan reveals the following:

• the South Korean market has grown significantly over the past three years and has become Mayfield's most significant customer base, representing 70% of the company's revenue. All contracts are paid in US dollars.
• due to languages differences, customers are unlikely to respond to requests to confirm outstanding balances at year-end.
• in the past 9 months, due to the COVID-19 pandemic, the volume of orders from South Korean customers has fallen 15%, and two major customers have requested extended payment terms.
• Mayfield is under pressure from Chinese competitors who have undercut their prices by 25%

Required

With reference to the information above, identify and justify:

1. Two accounts at risk of material misstatement
2. The assertion that is most at risk for each account balance identified in 1.
3. One specific substantive test of detail that would be most responsive to the risk identified.