Shane is getting to know his new client Clarrie Potters, a large discount electrical retailer. Ben was the engagement partner on the Clarrie Potters audit for the past five years, but had to rotate off the audit this year. Shane discovers that towards the end of last year Clarrie Potters installed a new IT system for inventories control. The system was not operating prior to the end of the last financial year so its testing was not included in the previous audit. The new system was custom-built for Clarrie Potters by a Melbourne-based software company by modifying another system they had designed for a furniture manufacturer and retailer.

Required

What audit risks are associated with the installation of the new inventories IT system at Clarrie Potters?