You are the senior auditor on the BZ Ltd audit. To date, you have obtained sufficient understanding of the company and its internal control system to assess inherent risk and control risk and plan your audit accordingly. Below are some extracted notes from your working papers: 1. The management accounts for the 10 months to 30 April 2011 show sales of $130 million and profit before tax of $4 million. Assume that sales and profit accrue evenly throughout the year. In the last year ended 30 June 2010, the BZ Ltd had sales of $110 million and profit before tax of $8 million. 2. You are aware there have been reliability problems with the company's products, which have resulted in customers making legal claims against the company and refusing to pay for the products. 3. The sales increase in the 10 months to 30 April 2011 was achieved by attracting new customers and offering extended credit. The new credit arrangements allow customers 3 months credit before their debt becomes overdue, rather than the 1- month credit period previously allowed. As a result of this change, the age of receivable has been increased from 1.6 months to 4.1 months. 4. This is your fifth year audit of BZ Ltd. In the past 4 years, there does not appear to have been significant disagreements between the audit team and the management. Required Using the above information for BZ Ltd, complete the following table (Table on pages 18 and 19): a) Identify four (4) factors that would impact an auditor's assessment of inherent or control risk. [4 marks) b) Explain how each factor would increase or decrease inherent risk or control risk. [8 Marks] c) Assuming other factors are unchanged, explain the impact of these factors impact on your audit plan. [6 Marks)