1. Difference of risk of material misstatement in purchase of hotel and manufacturer of gas and oil field equipment are:
a) There can misstatement in hotel occupancy during the year or in previous years which will impact purchase price. Similarly, for manufacturer of gas and oil field equipment there can misstatement about the production capacity of the facility.
b) In hotel more bookings can be stated than actual which will increase purchase price whereas in manufacturer of gas and oil field equipment more customer base can be shown to hike the purchase price.
c) In hotel there can be possibility that hotel was situated in tourist spot but at that spot no longer tourist comes due to some new tourist attraction where as in case of manufacturer of gas and oil field equipment there can be possibilty that it supplied equipment to exploration company which is no longer operational.
d) In hotel there can be possibility that it requires major renovation which has been hidden during deciding purchase price whereas in manufacturer of gas and oil field equipment there can be possibility that most of plant & machinery has become old and obsolete which needs replacement.
e) In hotel there can be possibility that some legal violations have been there like hotel in particular place cannot be more than 3 floors but hotel was of 4 floors whereas in case of manufacturer of gas and oil field equipment legal violation can be that there is no adequate facility for disposal of waste.
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