Reference no: EM133166757

Question - GGG Enterprises Ltd. deals in currency transactions. Most of the company's business involves buying and selling foreign currency to small businesses. GGG's strength in the past has been providing higher levels of service than its competitors. The company is owned by three brothers who are equal shareholders, each of whom has provided the company's long-term financing. To increase sales this year, GGG has reduced its profit margins. This strategy is not popular with the managers at the company's several locations because their bonuses are based on net income for their own location. However, the controlling shareholders have made it clear that they are committed to this strategy for the short term at least, but that margins are expected to improve in the future. Many of the company's capital assets are leased.

Required - Identify three factors that affect inherent risk regarding GGG Enterprises Ltd. For each factor, also state whether it increases or decreases inherent risk. Be very specific in explaining the WHAT and the WHY.