Scenario 4

Jupiter Mining Ore Limited is a major mining and exploration firm with operations in multiple galaxies. The company is looking to further expand its operations those solely within its core operations. The companys total assets exceed $100 billion, liabilities of $45 billion, and annual sales close to $200 billion. The preferred auditor is Bad Eyesight Auditors.

Required: Consider the following scenarios independently to determine the type of risk, level of risk and extent of audit work that may be necessary:

Jupiter Mining Ore Limited opened a new mining operation in on Morag, a planet in the Rings Galaxy. The new operations will account for 10% of the firms operations for the year. Being in a distant galaxy the company had to hire local staff. Unfortunately, few in the galaxy have accounting experience. Only one senior accountant accepted the offer to transfer to the Rings Galaxy to train new staff.

• Type of Risk

• Level of Risk

• Expected Level of Audit Work

• Justification