Inherent risk is a measure of the firm’s assessment of the susceptibility of material misstatement before considering the effectiveness of internal control. Briefly comment of the following areas that are inherent in auditing a business such as the Lakeside Company:

a. Lakeside holds an inventory of high technology items: consumer electronic equipment.

b. Lakeside distributes merchandise to retail stores.

c. Lakeside sells on credit throughout two states.

d. Lakeside rents a number of its stores.

Answer rating: 100% (QA)

a Lakeside holds an inventory of high technology items consumer electronic equipment Possibility of Theft The inventory being Consumer electronic item... View the full answer