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

Orders have been falling in the last three years and so James has launched an ambitious marketing campaign to get more customers. This has involved him flying first class round the world, showing potential rich buyers his colourful and high-quality brochure of boats and trying to get new orders. So far, no new orders have been achieved, but James remains hopeful. He approached the bank manager in the last month to ask for a loan, but the bank manager refused.