1. Several significant weaknesses in internal controls which were reported to management during the year, have not been addressed. 2. The holding company of Amaze Ltd notified all companies in the group that if reported profits for the year do not meet targets, resignations of the directors responsible for the poor performance would be expected.

3. Audit queries referred to management are routinely treated by the responsible officials as being immaterial or audit responses are too vague to be meaningful and implementable. 4. The company reconciles its creditors ledger with creditors statements only at year-end. 5. There is inadequate authorisation of expenditure incurred by management and employees on behalf of the company, e.g., salesmens expense claims and management travel claims. 6. Subsidiary companies in the Amaze Ltd group are strongly urged to purchase whatever they need from the holding company or from fellow subsidiaries. Usually this is not economically sound from either a subsidiary or group perspective. 7. Amaze Ltd, which is a listed company, is in negotiations with a large foreign company, which if successful, will be very lucrative for the company. The foreign company has indicated that the going concern ability of whichever company it contracts with is extremely important. Amaze Ltd have made trading losses for the last two years due to COVID-19. 8. Management and other employees constantly complain about the company and company morale is low. REQUIRED MARKS 2.1. Indicate which element of fraud each of the above risk factors (1 to 8) represents and give a brief explanation as to why each of the factors would increase the fraud risk of misappropriation.