You have been assigned to the audit of inventory for a private company that owns

and operates a chain of retail jewelers. The companys sales revenue has grown by

300% in the last two years, primarily by acquisitions. Because the company has

grown through acquisition, the company has not yet brought two acquired companies

(representing 35% of sales) under the companys inventory system. As a result, the

company is currently operating with three different inventory control systems.

What are your concerns about this client, and how would you address these

concerns? Discuss this in terms of the Audit Risk Model. (1 paragraph)