| The following are examples of conditions and events that may indicate the existence of risks of material misstatement. The examples provided cover a broad range of conditions and events; however, not all conditions and events are relevant to every audit engagement and the list of examples is not necessarily complete. |
| Operations in regions that are economically unstable, for example, countries with significant currency devaluation or highly inflationary economies. |
| Operations exposed to volatile markets, for example, futures trading. |
| Operations that are subject to a high degree of complex regulation. |
| Going concern and liquidity issues including loss of significant customers. |
| Constraints on the availability of capital and credit. |
| Changes in the industry in which the entity operates. |
| Changes in the supply chain. |
| Developing or offering new products or services, or moving into new lines of business. |
| Expanding into new locations. |
| Changes in the entity such as large acquisitions or reorganizations or other unusual events. |
| Entities or business segments likely to be sold. |
| The existence of complex alliances and joint ventures. |
| Use of off-balance-sheet finance, special-purpose entities, and other complex financing arrangements. |
| Significant transactions with related parties. |
| Lack of personnel with appropriate accounting and financial reporting skills. |
| Changes in key personnel including departure of key executives. |
| Deficiencies in internal control, especially those not addressed by management. |
| Inconsistencies between the entity's IT strategy and its business strategies. |
| Changes in the IT environment. |
| Installation of significant new IT systems related to financial reporting. |
| Inquiries into the entity's operations or financial results by regulatory or government bodies. |
| Past misstatements, history of errors or a significant amount of adjustments at period end. |
| Significant amount of non-routine or non-systematic transactions including intercompany transactions and large revenue transactions at period end. |
| Transactions that are recorded based on management's intent, for example, debt refinancing, assets to be sold and classification of marketable securities. |
| Application of new accounting pronouncements. |
| Accounting measurements that involve complex processes. |
| Events or transactions that involve significant measurement uncertainty, including accounting estimates. |
| Pending litigation and contingent liabilities, for example, sales warranties, financial guarantees and environmental remediation. |
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