Question 6 Rodwell Limited is a major retailer in the UK: focus on selling clothes directly its web- site. The company is experiencing significant growth due to its successful combination of fashionable items offering value for money. Tumover for the current year is budgeted to be 40 million. During this financial year, Rodwell opened its third distribution center. Also, during the year, the company upgraded its current computerized inventory system with the view to monitoring orders. The company continues to experience challenges with retaining staff to manage the rapid growth and recruiting is also an issue. The call center in particular has experience issues with staff; thus impacting on after sales care as well as the distribution and dispatch departments. As a solution to manage the work-load, Rodwell has been actively recruiting students from local Universities with a view to offering a place on the graduate management program. Required: a) Using the information given about Rodwell, outline the key audit risks to be addressed by the external auditors of Rodwell. For each risk identified, briefly explain why you consider that risk to be material for Rodwell's audit. (10 marks) b) The auditors of Rodwell are reviewing the internal control for the new computerised inventory and ordering system as part of their audit planning. List the internal control activities that you would expect to see which would provide assure auditors can place reliance on the internal controls. (10 marks) c) Explain the steps the auditors of Rodwell would take if internal controls were found to be weak. (5 marks) (Total: 25 marks)