Below are five statements that describe business risks. Consider each statement separately, and answer the following question: Is the business risk described in the statement one that will likely result in amisstatement in the current period?

Statement 1:Company A produces mobile telephones.Its best-selling product is the e-phone. A competitor has recently introduced a new product that performs much better than e-phone and has a lower price.

Is the business risk described in the statement one that will likely result in amisstatement in the current period?

Statement 2:Company B also produces telephones. The majority of its key customer relationships are closely held by one senior executive, Kevin Boyd. A board member of Company B questioned the wisdom of this relationship on the grounds that, if Kevin Boyd resigned and went to work elsewhere in the industry, some of Company B's key customers may follow him to a competitor.

Is the business risk described in the statement one that will likely result in amisstatement in the current period?

Statement 3: Company C supplies hotels, motels and restaurants with catering equipment and supplies. It requires all accounts to be settled within 30 days of the receipt of goods by the customer.Recent floods in New South Wales have left some of its largest customers in financial difficulties.

Is the business risk described in the statement one that will likely result in amisstatement in the current period?

Statement 4:Company D is in the child-care business. Recently it failed a safety check by the local fire-brigade, which found that Company D's fire extinguishers were out of date. The maximum penalty for such a breach of safety standards is $50,000.

Is the business risk described in the statement one that will likely result in amisstatement in the current period?

Statement 5:Company E is in the wine industry. Recently, the imposition of a tariff on imports by a country to which Company E exports some of its premium product, suddenly left it looking for an alternative market.

Is the business risk described in the statement one that will likely result in amisstatement in the current period?