You are recently appointed as the audit manager for Parkinson Ltd, a company which operates a traditional bookstore. The company has 2 two departments: 1. Orders by mail; and 2. E-commerce shopping (newly set-up). Parkinson Ltd is a new audit client. You are planning the audit for the year ended 31 October 2021. At an initial meeting with the directors, the below information was gathered by your team. The company's turnover is above Rs.170 million with a net profit of Rs.8 million. All the profit is currently earned in the Orders by mail department, although the Ecommerce department is expected to make a small net profit next year. The growth rate in turnover is at 30% per annum while the net profit has remained constant over the last four years. As from next year, the management team plans to expand the range of goods sold through E-commerce to include fashion clothing as well. The accounting system to book sales by mail order is completely manual. Recently, the audit team has been notified of errors in data entry which resulted in inappropriate invoicing to clients. The directors are of the opinion that since the errors are not material, there is no need to invest in new systems. The company accountant is not qualified and acquainted with the management team. The directors are planning the expansion of the company and they will require an amount of Rs. 60 million to finance the developments required. The amount will be used to design a new website and for working capital requirements. The directors are considering a bank loan as the preferred financing method. They expect a clean audit report prior to their meet up with the bank. Page 3 of 6 REQUIRED Describe the matters that give rise to audit risks and discuss the impact on these audit risks for the audit of Parkinson Ltd.