Would any of these situations decrease or increase the risk of material misstaement ?

timer Asked: Feb 6th, 2015

Question description

Client: manufacturers personal computer

During the planning phase of the audit you learned the following:

1.  the company has been a leader in the market, but over the last two years its market share has been declining.  during the current year it cut back from three shifts to two shifts because of the decreased demand.

2.  Consumer magazines indicate that the company's basic model doesn not have the new technological features that buyers are looking for.

3. Standard has continued to fill customer orders and ship merchandise at a pace consistent with two shifts a day.  Inventory quantities have decreased, and the company has eliminated the backlog of orders that existed in prior years.

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