You are the senior in charge of the audit or Jewels Manufacturing Limited. The information below has been prepared to assess the going concern risk of the company at the planning stage of the audit and to identify other issues that may impact on audit risk.

Ratio

Unaudited 2018 figures

2017

2016

2015

Accounts Receivable turnover

3.8

5.5

4.1

5.4

Operating profit to net sales

0.12

0.14

0.16

0.18

Earnings per share

$8.60

$8.52

$8.98

$8.52

a)What are the components of the audit risk model?

b) Identify issues which affect going concern and/or raise issues. Explain the audit steps that you would undertake to minimise audit risk.