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You are planning the audit of Lemcor Co. You have not previously been involved with the audit, and in addition, the entire audit team has changed from last year. Even the engagement partner has changed since the previous partner retired, two months ago. The managing director has brought the following matters to your attention: During the year the company branched out into a new line of inventory. It is manufactured and stored at a new factory bought for the purpose, as there was insufficient room to expand at the company's existing premises. The company intends to continue its policy of perpetual inventory count and therefore will not be carrying out an inventory count at the year-end. The company's overdraft facility is due to be renewed a month after the year-end. Which of the following are inherent risks of this audit? A. New line of inventory. B. New factory has been bought. C. Need to renew overdraft facility after the year-end. D. Entirely new audit team. E. Lack of year-end inventory count. |