ROOF Manufacturing Company is a mid-sized company that sells furniture. The company has been in business for 25 years. It has a strong reputation for super-quality products due to its high-quality fabric supplied by its major supplier SAPTCO, who recently increased their prices, disturbing the supply chain for ROOF company. In addition, the firm has been struggling financially due to the recent market recession. Consequently, the firms' leverage ratio (debt to assets) has increased compared to last year's leverage ratio by 30%. To mitigate those challenges, Mr. Fawaz, the firm's CEO, has suggested changing their marketing strategy to focus more on social media advertisements targeting to increase net income by 120,000SR. Currently, ROOF Company is undergoing an audit by a local accounting office. The audit team has identified the following potential risk areas: - The company has a large and complex inventory system. - The company's bad debt expense ratio, which measures the percentage of sales lost to bad debts, has increased to 14%. (Last year's ratio was 7% ) As a group, answer the following questions : 1. List all the risks mentioned in the provided case and classify them as financial statements or assertion-level risks. 2 marks. 2. Define which assertion level would be impacted by the identified assertion level risks. 1 mark 3. Provide an example of an analytical procedure to help you assess the identified risk associated with the bad debt account.? 0.5 mark. 4. Provide an example of a test of details procedure to help you examine the cutoff assertion level when testing an inventory account. 0.5 mark 5. Which of the mentioned risks is the most significant, and how can auditors react to it? 1 mark