You are the auditor of Cats Paradise Limited (CPL) for the year ended 30 June 2021. It is a national chain of cat wellness centres that features cat day care and boarding facilities. CPL also sells premium cat food. During the year, CPL refurbished two wellness centres. The Chief Financial Officer mentioned to you that 'sometimes it is challenging to distinguish between capital improvements and maintenance expenditure'.

CPL invoices its customers upfront for the boarding facilities. It recently changed its billing system to a new off-the-shelf system. Since then, there have been a few instances of incorrect amounts being billed to the customer.

CPL's inventory turnover has slowed dramatically over the past year. This is an issue for some of the premium cat food lines, which have a relatively short shelf life.

Required:

From the above information provided in relation to CPL:

1. Identify FOUR key accounts that are at high risk of misstatement. (2 marks)
2. For each account identified in (1) above:
3. Provide a brief explanation as to why the account is at risk; and (8 marks)

List the key assertion where audit efforts should be concentrated