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Unformatted text preview: integrity should also be considered. 5-37. Based on this case scenario, list and explain significant risk factors that will affect Custiss & Branchs decision regarding whether to propose on the engagement. A list of significant risk factors that may affect Custiss & Branchs decision are: 1. The related party transactions. 2. Declining cash flows from operations. 3. The IPO would require a greater amount of experience. 4. The complexity of Hemings business operations. 5. The companys financial statement may be misstated because the profit margin exceeds the industry average despite declines in cash flows from operations and inventory turnover....
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- Spring '11