[Jeff Green 98]

I have some questions about the increase and decrease of inherent, control and detection risk for SIM that I am not really sure. How does each of the following affect IR, CR and DR?

e.g. Audit team expended scope of accrual payroll expenses examination -> DR decreases, no impact on IR and CR.

1. Achieve 2nd most profitable time this year, but sales are not met management expectation

2. CEO has been with the company for past 20 years, retire in this year August

3. Audit team has no disagreement with the management for the past 5 years

4. Audit team initiated adjustment to priced inventory entry last year

5. New interim CEO improved procedures in A/R and accounts recording

6. The company uses derivative in year 1 for the first time and prepare to use more in year 2. They have asked a specialist to design proper control.

7. The company intents to use derivatives, but they offer relative training to their employees.

8. The company’s price service uses a service organization, they will get a report of fair value each year as well as the method to evaluate fair value.

9. The client has recruited three internal auditors to fill in the vacancy.

10. The account receivable turnover decreases.

11. The allowance for uncollectible accounts beyond the limit auditor set considered acceptable

12. The sales decreased as expected

Thanks for all your help.