(b)

Up to 1 mark per well described risk and up to 1 mark for each well explained response. Overall max of
6 marks for risks and 6 marks for responses.
– Fraud of previous finance director
– Competence of new finance director
– Treatment of capitalised development expenditure
– New loan finance obtained
– Completeness of finance costs
– Loan covenants
– Post year-end sales returns
– Goods in and out during the inventory count
– Profit on disposal of plant and equipment

12
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