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Riverfront Foods Ltd has been producing organic snacks for the Australian market for 75 years. Recent free trade agreements have placed Riverfront Foods in direct

Riverfront Foods Ltd has been producing organic snacks for the Australian market for 75 years. Recent free trade agreements have placed Riverfront Foods in direct competition with cheaper snacks manufactured overseas. To retain market share, Riverfront Foods has been selling part of its snack range at less than cost, but overall profit figures remain strong. identify and briefly justify the component(s) of audit risk affected (inherent, control, detection). (6 marks) explain the overall impact (increase, unchanged, decrease) on audit risk (4 marks) You are engaged to audit the financial report of Rarotonga Limited after the annual physical inventory count has been conducted. The accounting records are not sufficiently reliable to enable you to become satisfied as to the year-end inventory balances

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