1Most likely potential Fraud Risk

2Acceptable Audit Risk: External Users Reliance on Financial Statements

3Acceptable Audit Risk: Management Integrity

4 Inherent Risk: Relevant Assertions of Valuation and Completeness

5Acceptable Audit Risk: Likelihood of Financial Difficulties

6Does not represent ANY type of risk.

7Inherent Risk: Relevant Assertions of Accuracy and Completeness

A) The client has grown to be the largest company in the industry in terms of Market Share, Sales, Assets and Liabilities.

B) The client engages in several material equipment purchase transactions with entities owned by family members of several of the client's senior executives.

C) The allowance for doubtful accounts is based on significant assumptions made by management.

D) Use this Selection to match to any unused items.

For each situation, select thematching risk type. Finally, determine which situation is most likely to represent a Fraud Risk.