Identify and explain the inherent audit risks in the external audit for following financial statements.

Because of the small facilities and factory and the specialist nature of the boats made, H.A. makes a maximum of five boats each year. The boats are made to order to unique customer specifications. Each boat comprises thousands of individual parts, many of which are made by H.A. specifically for individual boats. Boats also include the best available radio and radar equipment. At the financial year-end several boats are part-finished and recorded as work in progress (WIP). In addition to the WIP, there is a significant amount of raw materials and parts on the factory shelves much of which is left over from boats built in previous years.