Queen Island Dairy is a boutique cheese maker based on queen island. Over the years, the business has grown firstly by supplying local retailers, and then through exports. In addition, there is a "farm gate" shop and cafe located next to the main processing plant on queen island, serving tourist who also visit the other specialist food and wine businesses in the region. Quality control over the cheese manufacturing process and storage of raw materials and finished products at Queen Island Dairy is extremely high. All members of the business are committed to high product quality because any poor food handling practices which could result in a drop in cheese quality or contamination of the products would ruin the business very quickly.

The export arm has been built up to become the largest revenue earner for the business by the younger of the two brothers who have run queen island dairy since it was established. Jim Bannock has a natural flair for sales and marketing, but is not so good at completing the associated detailed paperwork. Some of the export deals have been poorly documented and Jim often agrees to different prices for different clients without consulting his older brother, bob, or informing the sales department. Consequently, there are often disputes about invoices and Jim makes frequent adjustment to debtor accounts using credit notes when clients complain about their statements. Jim sometimes falls behind in responding to customer complaints because he is very busy juggling the demands of making export sales and running his other business, cafe consulting, which provides contract staff for the cafe business at Queen Island Dairy.

Requires:

a. identify the factors that would affect the preliminary assessment of inherent risk and control risk at queen island dairy

b. explain how these factors would influence your choice between the predominantly substantive approach and the lower assessed level of control risk approach for sales, inventory and debtors.