You are a second year audit trainee at REKP Inc., a local medium-sized audit firm in Pretoria. You are currently busy with the 31 March 2020 year-end audit of the Menlyn branch of Shopright Ltd (hereafter Shopright), Africa's largest food retailer that operates in more than 2 934 outlets in 15 countries across Africa and the Indian Ocean Islands.

The company's headquarters are situated in the Western Cape province of South Africa and as of 2019, they have employed more than 147 000 people. With over 22 million shoppers, they continue to provide many communities with a variety of food products, household goods and small appliances at the lowest possible prices. 

Together with a few other trainees, you are responsible for the audit of total purchases of R380 567 and total creditors of R140 435 of the Menlyn branch. Because the audit needs to be finished within the next week, the other trainees have already performed the majority of the work and the audit manager has asked you to complete some of the outstanding tasks. These outstanding tasks are as follow: 

Outstanding task 1 

Being in the retail industry, Shopright is exposed to a number of business risks related to the retail industry. Owning any type of business comes with inherent risks and operating a retail store is no different. These risks can have a significant impact on the business. 

In order to add value to the audit, the audit manager has requested that you describe some business risks that Shopright is exposed to being in the retail industry, especially regarding their inventory Management can then ensure that they address these business risks as part of their risk management process SUI тот. 6 x.

REQUIRED: 

1.1 With reference to outstanding task 1: 

Discuss any six (6) business risks as part of the retail industry specifically related to Shopright's inventory.

For each business risk identified, discuss the possible impact that the risk could have on Shopright's business. 6 x