You are auditing Great Clothes Ltd (GCL), a large clothing manufacturer that sells clothing wholesale to large department stores. The industry is highly competitive and fast-moving due to continual changes in fashion. GCL was established in 1982, however for the last four years it has been making only small profits. GCL's bank loan is contingent on GCL producing at least break-even results. You have noted the following independent events in relation to the 30 June 2020 audit: a) In order to secure its key customers as long-term clients, GCL now offers some of its clothing lines on a 'sale or return' basis. The accountant estimates that around 25 per cent of sales are now made on these terms. Sales staff estimate around 15 per cent of sale or return items are returned to GCL for a refund. At present, manual records are kept of sale or return items, which for accounting purposes are recorded as sales at the time the goods are delivered. As sale or return sales are expected to increase, the accountant is considering having the computer system modified to automatically track these goods. b) Sales staff are currently paid a salary based on their years of experience, plus a flat $5000 bonus each per quarter if quarterly sales targets are met or exceeded. This system will end on 31 March 2020 and a new scheme will be implemented. Under this new scheme, sales staff will be paid a lower salary and sales will be tracked by the individual staff member. If an individual's target is met or exceeded, the salesperson will receive a commission of 10 per cent of their sales. c) Due to increased competitive pressures, GCL has recently moved the manufacture of some of its clothing lines to Bangladesh. The fabric is made in Australia, sent to Bangladesh to be cut and stitched, then returned to Australia in finished form. GCL saves around 25 per cent in costs compared to the equivalent Australian-made item. However, the manufacturing process takes longer and on a few occasions late delivery from Bangladesh has resulted in lost sales. d) With the move of some manufacturing offshore, GCL found itself with some excess factory machinery. A proposed sale to a small firm in Sydney has recently fallen through, and GCL is having difficulty finding other buyers. The accountant has told you that GCL is considering consigning the machinery to an auction house to sell it for the best possible price. REQUIRED Explain how each of these events will affect inherent risk and the account/financial report area affected.