Jai is getting to know his new client Turquoise Traders, a large discount electrical retailer. Wendy was the engagement partner on the Turquoise Traders audit for the past five years, but had to rotate off the audit this year. Jai discovers that towards the end of last year Turquoise Traders 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 Turquoise Traders 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 Turquoise Traders?