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Q. Increasing the risk rating of building and construction?
Stakeholders indicated that there is a significant risk of phoenix activity in the building and construction industry. Some stakeholders felt that the risk was such that the industry should be ascribed a risk rating of high risk. As already described, it was decided to rank the building and construction industry as medium risk in the core modelling due to:
- the concentration of risk in parts of the building and construction industry
- the high levels of employment in the industry meaning that any increase in the risk rating has a significant impact on the results (as shown below).
Sensitivity analysis was conducted of increasing the risk rating to high risk.
Schemes of fraud: Auditors must not be made liable for not tracking out ingenious and carefully laid schemes of fraud whenever there is nothing to arouse their suspicion, and
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