Frontenac Construction,your Audit Client,is a Construction Company

Multiple Choice

Frontenac Construction,your audit client,is a construction company.In the initial planning phase of the audit,you identified that it has many contracts with severe non-performance clauses if any of the current constructions are not completed on the dates set in the contracts over the next three years.As the auditor,you would set the inherent risk for sales and penalties as

A) high.
B) moderate.
C) low.
D) unknown: this cannot be determined until more procedures are performed.