Explorer

The firm used an issuer-prepared report in its substantive procedures to test the inventory reserve but did not perform any procedures to test or test any controls over the accuracy and completeness of this report. (AS 1105.10)

The firm did not identify and test any controls over (1) the accuracy and completeness of issuer-produced information used in the operation of the above controls and (2) the relevance and reliability of certain external information related to inventory used in the operation of one of the above controls. (AS 2201.39)

The issuer recorded an inventory reserve and the firm's approach for substantively testing the inventory reserve was to test the issuer's process. The following deficiency was identified: · The firm did not perform procedures to test or (as discussed above) identify and test controls over the accuracy and completeness of certain issuer-produced information used by the issuer to develop the inventory reserve. (AS 1105.10)

The firm performed inventory observations at an interim date and performed roll-forward procedures for the period from the interim date to year end. The firm did not perform any substantive procedures to test or in the alternative test controls over the accuracy and completeness of information the firm used in performing the roll-forward procedures. (AS 1105.10)

The firm's approach for testing inventory reserve was to review and test management's process. The firm did not test the accuracy and completeness of certain data used by the issuer to estimate the inventory reserve. (AS 1105.10)

For certain inventory the firm did not perform any procedures to test or as discussed above sufficiently test controls over the accuracy and completeness of an inventory aging report generated from the one of the issuer's IT systems it used to test the issuer's obsolete inventory reserve. (AS 1105.10)

The component relied on a specialist that it employed for the measurement of the density of certain inventory and engaged an external specialist to assist in the measurement of the stock volume of certain inventory which were used to calculate the inventory quantity. To test the existence of inventory the firm observed the component's physical inventory counts at select locations and performed procedures to test the rollforward of inventory from the dates in which the inventory was physically counted to year-end using a system-generated report provided by the component. To test the valuation of inventory the firm used certain other system generated reports provided by the component. The following deficiencies were identified: · The firm's observation procedures at the selected locations were not suitable because the firm did not perform any substantive procedures to (1) investigate certain variances identified between the firm's test counts and the component's inventory records; (2) compare certain quantities of inventory measured by the firm to the component's inventory records; and (3) test inventory cut-off at one location. Therefore these observations did not provide sufficient evidence of the quantity of inventory at these locations. (AS 2510.09)

The component relied on a specialist that it employed for the measurement of the density of certain inventory and engaged an external specialist to assist in the measurement of the stock volume of certain inventory which were used to calculate the inventory quantity. To test the existence of inventory the firm observed the component's physical inventory counts at select locations and performed procedures to test the rollforward of inventory from the dates in which the inventory was physically counted to year-end using a system-generated report provided by the component. To test the valuation of inventory the firm used certain other system generated reports provided by the component. The following deficiencies were identified: · The firm did not perform substantive procedures to test the density and volume conversion factors used to determine the inventory quantity for certain items selected for testing beyond obtaining the factors from the company's specialists. Further the firm did not perform any procedures to use the work of the company's specialists as audit evidence. (AS 1105.A1 - .A10; AS 2510.09)

The component relied on a specialist that it employed for the measurement of the density of certain inventory and engaged an external specialist to assist in the measurement of the stock volume of certain inventory which were used to calculate the inventory quantity. To test the existence of inventory the firm observed the component's physical inventory counts at select locations and performed procedures to test the rollforward of inventory from the dates in which the inventory was physically counted to year-end using a system-generated report provided by the component. To test the valuation of inventory the firm used certain other system generated reports provided by the component. The following deficiencies were identified: · The test intervening transactions between the dates of its observation procedures and year-end the firm selected a sample of transactions related to the purchase and sale of inventory which represented approximately 86% and 28% of total inflows and outflows respectively of the total inventory movement. The samples the firm used to test the inventory movement did not provide sufficient appropriate audit evidence because in planning the samples the firm did not consider the characteristics of the entire population of inventory inflows and outflows and how differences in those characteristics would affect the determination of the number of separate inflow and outflow samples. (AS 2315.16 .23 and .23A)

The component relied on a specialist that it employed for the measurement of the density of certain inventory and engaged an external specialist to assist in the measurement of the stock volume of certain inventory which were used to calculate the inventory quantity. To test the existence of inventory the firm observed the component's physical inventory counts at select locations and performed procedures to test the rollforward of inventory from the dates in which the inventory was physically counted to year-end using a system-generated report provided by the component. To test the valuation of inventory the firm used certain other system generated reports provided by the component. The following deficiencies were identified: · The firm did not perform sufficient substantive procedures to test the intervening transactions it selected for testing because the firm's procedures were limited to agreeing certain information related to the transactions to data provided by the component. (AS 2510.12)

The component relied on a specialist that it employed for the measurement of the density of certain inventory and engaged an external specialist to assist in the measurement of the stock volume of certain inventory which were used to calculate the inventory quantity. To test the existence of inventory the firm observed the component's physical inventory counts at select locations and performed procedures to test the rollforward of inventory from the dates in which the inventory was physically counted to year-end using a system-generated report provided by the component. To test the valuation of inventory the firm used certain other system generated reports provided by the component. The following deficiencies were identified: · The firm did not perform any procedures to reconcile the quantities of certain inventory items counted at one location to the quantities of those items in the inventory schedule used to roll the results of the firm's observation procedures forward to year-end. (AS 2510.12)

The component relied on a specialist that it employed for the measurement of the density of certain inventory and engaged an external specialist to assist in the measurement of the stock volume of certain inventory which were used to calculate the inventory quantity. To test the existence of inventory the firm observed the component's physical inventory counts at select locations and performed procedures to test the rollforward of inventory from the dates in which the inventory was physically counted to year-end using a system-generated report provided by the component. To test the valuation of inventory the firm used certain other system generated reports provided by the component. The following deficiencies were identified: · The firm did not perform any substantive procedures to test the existence of inventory held at a third-party warehouse. (AS 2510.14)

The component relied on a specialist that it employed for the measurement of the density of certain inventory and engaged an external specialist to assist in the measurement of the stock volume of certain inventory which were used to calculate the inventory quantity. To test the existence of inventory the firm observed the component's physical inventory counts at select locations and performed procedures to test the rollforward of inventory from the dates in which the inventory was physically counted to year-end using a system-generated report provided by the component. To test the valuation of inventory the firm used certain other system generated reports provided by the component. The following deficiencies were identified: · The firm did not perform any substantive procedures to test the cost of raw materials inventory. (AS 2301.08)

The component relied on a specialist that it employed for the measurement of the density of certain inventory and engaged an external specialist to assist in the measurement of the stock volume of certain inventory which were used to calculate the inventory quantity. To test the existence of inventory the firm observed the component's physical inventory counts at select locations and performed procedures to test the rollforward of inventory from the dates in which the inventory was physically counted to year-end using a system-generated report provided by the component. To test the valuation of inventory the firm used certain other system generated reports provided by the component. The following deficiencies were identified: · The firm did not perform any procedures to test or test any controls over the completeness and/or accuracy of certain data or reports used in its substantive testing of inventory. (AS 1105.10)

The firm's substantive procedures at year end to test the unit cost of this inventory included selecting a sample of inventory items for testing. The following deficiencies were identified: · The firm did not perform sufficient procedures to test the cost of the raw materials included in the selected items because its procedures were limited to comparing certain of these costs to system-generated reports. (AS 2301.08)

The firm performed procedures to test the accuracy and completeness of certain system-generated reports that the issuer used to estimate the reserve for excess and obsolete inventory. The extent of these procedures was not sufficient because the firm used the incorrect amount to calculate its samples of items to test from these reports. (AS 1105.10)

The firm selected for testing certain controls that consisted of the issuer's review of the (1) allocation of labor and overhead costs to inventory and (2) reserve for excess and obsolete inventory. The firm did not identify and test any controls over the accuracy and completeness of certain information used in the operation of these controls. (AS 2201.39)

The firm did not perform procedures to test or test any controls over the completeness of a system-generated report that the firm used (1) to make its selections to test a control over the recording of inventory upon receipt and (2) in its substantive testing of inventory cut-off. (AS 1105.10)

The firm selected for testing a control over the issuer's review of the reserve for excess and obsolete inventory at one business unit. The firm did not identify and test any controls over the accuracy and completeness of certain information used in the operation of this control. (AS 2201.39)

The firm used a system-generated report in its substantive procedures to test the remainder of the issuer's reserve for excess and obsolete inventory. The firm relied on its testing of the accuracy and completeness of this report that was performed in the prior year. The firm did not perform sufficient procedures to test or sufficiently test controls over the accuracy and completeness of this report because it did not take into account that user access controls over this IT system were ineffective. (AS 1105.10)

The firm's substantive procedures to test the unit cost of certain manufactured inventory consisted of (1) selecting a sample of inventory items for testing and (2) performing substantive analytical procedures. The following deficiencies were identified: · For the items selected for testing the firm did not perform sufficient procedures to test the cost of the raw materials because its procedures were limited to comparing certain of these costs to system-generated reports. (AS 2301.08)

The firm's substantive procedures to test the reserve for excess and obsolete (E&O) inventory included selecting a sample of inventory items for testing. The following deficiencies were identified: · The firm did not perform any procedures to test or test any controls over the accuracy and completeness of certain issuer-produced reports used in these substantive procedures. (AS 1105.10)

The firm selected for testing various controls over revenue and inventory but did not identify and test any controls over the accuracy and completeness of certain system-generated data or reports that were used in the operation of these controls. (AS 2201.39)

The firm's internal inspection program had inspected this audit reviewed these areas and also identified the deficiencies below. The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to inventory. The firm selected for testing an automated control that used data generated or maintained by these IT systems. · The firm selected for testing a control over user access to these IT systems but did not perform procedures to test or test any controls over the accuracy and completeness of certain reports that the firm used in its testing. (AS 1105.10)

The firm's internal inspection program had inspected this audit reviewed these areas and also identified the deficiencies below. The firm did not identify and test any controls that addressed the risk related to the accuracy and completeness of data transferred from the issuer's inventory subledger to the general ledger. (AS 2201.39)

The firm's internal inspection program had inspected this audit reviewed these areas and also identified the deficiencies below. The firm selected for testing controls over the calculation of the issuer's excess and obsolete inventory reserve and inventory unit costs. The firm did not identify and test any controls over the accuracy and completeness of certain system-generated data or reports that were used in the operation of these controls. (AS 2201.39)

The firm's internal inspection program had inspected this audit reviewed these areas and also identified the deficiencies below. As a result of the firm's control testing deficiencies the firm did not perform sufficient substantive procedures to test the valuation of inventory as follows: · The firm did not perform procedures to test or test any controls over the accuracy and/or completeness of certain system-generated data or reports that the firm used in its substantive testing. (AS 1105.10)

For in-transit inventory and freight included in inventory the firm did not perform procedures to test or test any controls over the accuracy and completeness of certain system-generated data or reports the firm used in its substantive testing including its substantive analytical procedures. (AS 1105.10; AS 2305.16)

With respect to certain of the issuer's inventory disclosures the following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of its financial statement disclosures but did not test the aspect of the control that addressed the accuracy and completeness of the issuer-prepared schedules used to prepare these inventory disclosures. (AS 2201.42 and .44)

With respect to certain of the issuer's inventory disclosures the following deficiencies were identified: · The firm used these issuer-prepared schedules in its substantive testing of these inventory disclosures but did not test or sufficiently test controls over the accuracy and completeness of these schedules. (AS 1105.10)

The firm did not perform any procedures to test or test any controls over the accuracy and completeness of certain data and reports used in its substantive testing of inventory. (AS 1105.10)

The firm's substantive procedures to test certain inventory costs consisted of analytical procedures. The firm did not test or in the alternative test controls over the accuracy and completeness of the data it used to develop its expectations. (AS 2305.16)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiencies below. The firm selected for testing controls over inventory but did not identify and test any controls over the accuracy and completeness of certain system-generated data or reports that the control owners used in the operation of these controls. (AS 2201.39)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiencies below. As a result of the firm's control testing deficiencies discussed above the firm did not perform sufficient substantive procedures as follows: · The firm did not perform procedures to test or sufficiently test controls over the accuracy and completeness of a system-generated report that it used in its substantive testing of inventory. (AS 1105.10)

The firm's approach to substantively test the excess and obsolete inventory reserve was to develop an independent expectation. The firm did not perform any procedures to test or in the alternative test any controls over the accuracy and completeness of a report generated from the issuer's inventory management system and used to develop its expectation. (AS 1105.10)

The issuer performed cycle counts of certain inventory held at various locations. The firm selected for testing a control that consisted of the issuer's reviews of the cycle-count results. The firm did not identify and test any controls over the accuracy and completeness of the reports that the control owners used in the operation of this control. (AS 2201.39)

The issuer performed cycle counts of certain inventory held at various locations. The firm selected for testing a control that included the issuer's reviews of the cycle-count results. The firm did not identify and test any controls over the accuracy and completeness of certain reports that the control owners used in the operation of this control. (AS 2201.39)

For inventory which was affected by the audit deficiencies related to change management the following additional deficiencies were identified: - The firm selected for testing a control over the determination and recording of a slow-moving inventory provision for certain inventory which included an automated control that calculated the provision. The firm did not identify and test any controls over the accuracy and completeness of a system-generated report that was used in the operation of this control. (AS 2201.39)

For inventory which was affected by the audit deficiencies related to change management the following additional deficiencies were identified: - The firm selected for testing a control over the determination and recording of a slow-moving inventory provision for certain inventory which included an automated control that calculated the provision. The firm did not perform any substantive procedures to test or in the alternative test controls over the accuracy of the system-generated report which it used to evaluate the reasonableness of the slow-moving inventory provision. (AS 1105.10)

For inventory which was affected by the audit deficiencies related to change management the following additional deficiencies were identified: - The firm did not perform any substantive procedures to test or with respect to change management to sufficiently test controls over the accuracy and completeness of information generated from the issuer's IT system that was used to substantively test the cost of certain inventory. (AS 1105.10)

For inventory which was affected by the audit deficiencies related to change management the following additional deficiencies were identified: - The firm selected for testing a control over the determination and recording of an obsolescence provision for certain inventory that consisted of the issuer's review of a system-generated provision report and approval of related adjustments to inventory. The firm did not identify and test any controls over the (1) data input into the issuer's IT system and used to calculate the provision and (2) accuracy and completeness of the system-generated report that was used in the operation of the control. (AS 2201.39)

Certain inventory held by the issuer in several locations was subject to cycle counts. The following deficiencies were identified: · For another one of these locations the issuer used an inventory management system in performing its cycle counts. The firm did not identify and test controls over the accuracy and completeness of the cycle-count selection reports generated by this system and used by the issuer in the performance of the cycle counts at this location. (AS 2201.39)

The firm selected for testing controls over the recording of inventory. The firm did not identify and test any controls over the accuracy and completeness of certain reports used in the operation of these controls. (AS 2201.39)

The firm used certain reports in its substantive testing of inventory but did not perform any procedures to test or test controls over the accuracy and completeness of this information. (AS 1105.10)

The firm selected for testing controls over the transfers of data between certain of the issuer's inventory systems and the general ledger. The firm did not identify and test any controls over the accuracy and completeness of certain reports used in the operation of these controls. (AS 2201.39)

As a result of the firm's control testing deficiencies the firm did not perform sufficient substantive procedures over this inventory as follows: · The firm did not perform sufficient procedures to test or sufficiently test controls over the accuracy and completeness of certain system-generated data or reports the firm used in its substantive testing including substantive analytical procedures. (AS 1105.10; AS 2305.16)

The issuer performed cycle counts of certain inventory held at one of its warehouses. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review and approval of count frequencies that had been assigned to this inventory. The firm did not identify and test any controls over the accuracy and completeness of certain system-generated reports used in the operation of this control. (AS 2201.39)

The firm selected for testing a control that included the issuer's cycle-count procedures for certain inventory held at other locations. The firm did not identify and test any controls over the accuracy and completeness of a system-generated report used in the operation of this control. (AS 2201.39)

As a result of the firm's control testing deficiencies the firm did not perform sufficient other audit procedures as follows: · The firm did not perform sufficient procedures to test or sufficiently test controls over the accuracy and completeness of certain system-generated data or reports the firm used in its substantive testing. (AS 1105.10)

The issuer held certain inventory at external warehouses. The firm selected for testing controls that consisted of the issuer's review and reconciliation of this inventory to the general ledger. The firm did not identify and test any controls over the (1) accuracy and completeness of certain issuer-produced data and reports and (2) reliability of data and reports that the issuer obtained from the external warehouses that were used in the operation of these controls. (AS 2201.39)