You are the audit senior on the audit of Harmattan Beverages Limited for the year ended 31 December. The following matters have come to your attention during planning: (i) The company introduced a new inventory management system three months before the year end. The changeover was rushed and reconciliations between the new system and the general ledger have not been completed. (ii) A significant proportion of directors' remuneration is a bonus based on reported profit before tax. (iii) The company's main distributor, which accounts for 30% of revenue, has been placed under receivership two weeks after the year end. (iv) The finance director prepares the bank reconciliation personally and no one reviews it. Required: (a) For each matter, identify the audit risk and explain the auditor's response. (20 marks) (b) Explain the difference between inherent risk and control risk, using examples from the scenario. (5 marks)