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The annual growth in spending for information technology products and services is expected to be 3 percent per year for the next three years. In

The annual growth in spending for information technology products and services is expected to be 3 percent per year for the next three years. In the past year, the company has decided to increase sales by extending credit to clients with slightly higher credit risk. KCN's primary business objectives are to increase revenues by 6 percent and increase net income by 8 percent each year for the next three years.

Major strategies to achieve those objectives include

  • Aggressive marketing of products and services through increased advertising.
  • Sales to customers with a higher credit risk profile.
  • New software development.

As the lead for this audit, what red flags do you identify with KCN's business objective as it relates to revenue growth of 6 percent? What Accounts are impacted by these red flags? How do you adjust your audit plan?

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