Valspar recently upgraded their accounting system a basic general ledger package to a complex state-of-the-art enterprise resource planning system in the last nine months of the year and is nearly 100% complete by the balance sheet date. Which of the following best describes the main effect of this event on the audit risk model for the current year? 1) It will likely increase the risk of material misstatement. 2) It will likely decrease the risk of material misstatement. 3) It will likely decrease the audit risk. 4) It will likely increase the detection risk. The PWC auditor understands the entity and its environment by assessment procedures except: 1) Inquiries of management and others. 2) The level of detection risk. 3) Analytical procedures. 4) Observation and inspections. Which senior management act decision at Micron, Inc. most likely would increase an auditor's concern about the risk of intentional manipulation of financial statements? 1) Turnover of senior accounting personnel is low. 2) Insiders recently purchased additional shares of the entity's stock. 3) Management places substantial emphasis on meeting earnings projections. 4) The rate of change in the entity's industry is slow