Admiralty may be pressured to raise funds and misstate financial information to soothe investors and attract new investors. The risk of misstatements to the financial reports in light of reduced financing due to the global recession may hit Admiralty if their fundamentals were not in order to begin with, hence pressuring the company to alter their financials to appear in a growth position when they might not actually be so.

Memo

To: Partner X, Auditor

From: Partner Y, Auditor

Re: Inherent Risks to the Financial Report Audit for Admiralty Resources NL.

This memo is to discuss some specific areas of risk to the Audit Plan for Admiralty Resources NL. Admiralty Resources is a global diversified mining company, with primary operations in South America (Chile and Argentina) and Australia. They mine and explore for iron ore, nickel, zinc, and cobalt. Admiralty owns three subsidiaries directly involved in the mining process, with...
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