Imagine this situation from the following perspectives:
1. A company awaiting arrival of the goods or inventory (IKEA, for example, although you may choose a different company with different risks associated with the goods or inventory)
2. A shipping company with ships caught in the mess, and in particular, the one that dropped the unfortunate anchor.
3. The auditor of the company awaiting arrival of the goods
4. The auditor of the shipping company
Then, from the two auditors’ perspectives, identify inherent risks of material misstatement arising from this event in the financial statements of the company and in the financial statements of the shipping company, and develop a strategy for each auditor to address those risks. Consider the Accounting, Inherent Risk, Management Assertions and ESG/sustainability implications. You may present your thoughts in paragraphs, or in a table, if that is easier.
