Scenario 1

Jupiter Mining Ore Limited is a major mining and exploration firm with operations in multiple galaxies. The company is looking to further expand its operations those solely within its core operations. The companys total assets exceed $100 billion, liabilities of $45 billion, and annual sales close to $200 billion. The preferred auditor is Bad Eyesight Auditors.

Required: Consider the following scenarios independently to determine the type of risk, level of risk, and extent of audit work that may be necessary:

Regulators have recently changed the method and requirements for estimating mining ore sales. The new requirements needed Jupiter Mining Ore Limited to recode significant areas of its electronic recording system. The new requirements, however, did not require additional training of existing accounting staff.

• Type of Risk

• Level of Risk

• Expected Level of Audit Work

• Justification