The audit firm where you are on attachment has the audit client JCC, an importer...
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Accounting
The audit firm where you are on attachment has the audit client JCC, an importer and wholesaler of inexpensive, non-branded second hands clothes . It has a high turnover of staff, its accounting systems are old and out-of-date and its controls, including credit control, are poor. Accounting errors are frequent. Despite this, sales have increased. An economic downturn has resulted in a number of smaller customers being unable to pay their debts but this has been more than compensated for by an overall increase in sales of less expensive clothes. JCCs customers comprise market traders, independent shops and Internet retailers. Required: Basing on the information given above describe the audit risks likely to be associated with the audit of JCCs, the possible effect on the financial statement and an audit approach that is likely to reduce those risks to an acceptable level. (you may present you answer in the following format.
Statement from scenario
Type of risk(inherent, control or detection)
Possible effect on the financial statement
audit approach to reduce risks
Answer & Explanation
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