Question: The audit client implemented a new procedure for approving customers and processing sales orders to ensure that credit limits are not exceeded. As a result

The audit client implemented a new procedure for approving customers and processing sales orders to ensure that credit limits are not exceeded. As a result of this new process, the client has found that there has been less need to offer discounts to customers to ensure timely payment.

Required:

  1. Indicate how (increase/decrease/no effect) this issue would affect the components of the audit risk model and
  2. Identify and briefly explain what the appropriate the audit strategy should be when performing the audit of this matter.

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