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The principal auditor instructed the firm to identify likely sources of potential misstatement ('LSPMs') and evaluate the design and operating effectiveness of specific controls related to the inventory process ('inventory controls') to ensure that the controls were designed and implemented to address the LSPMs identified by the firm and the risk of misstatement identified by the principal auditor for each relevant assertion. The following deficiency was identified: · For certain of the inventory controls tested the firm did not perform procedures to test or test any controls over the accuracy and completeness of a system-generated report and other data provided by management which were used by the firm to test the controls. (AS 1105.10)

The issuer used multiple IT systems to initiate process and record transactions related to inventory. The following deficiency was identified: · The firm selected for testing certain manual controls over inventory that consisted of the issuer's (1) approval of purchase orders and (2) review and confirmation of vendor balances. The firm did not identify and test any controls over the completeness of certain system-generated reports used in the operation of these controls. (AS 2201.39)

The firm did not perform procedures to test or identify and test controls over the accuracy and completeness of certain system-generated reports that it used to substantively test certain inventory. (AS 1105.10)

The firm used the issuer's inventory aging report in its substantive testing of the inventory reserve. The firm did not test or test controls over the accuracy and completeness of the information included in the inventory aging report. (AS 1105.10; AS 2501.11)

For certain other inventory the firm did not perform any substantive procedures to test or in the alternative identify and test any controls over the accuracy and completeness of certain reports that it used in its inventory cost testing. (AS 1105.10)

The firm did not perform sufficient substantive procedures to test the valuation of inventory as follows: · The firm did not perform any procedures to test or sufficiently test controls over the accuracy and completeness of certain system-generated data that it used to substantively test the valuation of inventory. (AS 1105.10)

The firm selected for testing controls that consisted of management's reviews of system-generated reports used to determine the (1) amount of labor and overhead capitalized into inventory and (2) inventory obsolescence reserve. The firm did not identify and test any controls over the accuracy and completeness of the system-generated reports used in the operation of these controls. (AS 2201.39)

The firm did not perform sufficient procedures to test the valuation of inventories because it did not: · Perform any procedures to test or test any controls over the accuracy and completeness of the bill of materials reports. (AS 1105.10)

The firm did not perform sufficient procedures to test the valuation of inventories because it did not: · Perform any procedures to test or test any control over the accuracy and completeness of the number of labor hours used by the issuer to determine the labor costs allocated to WIP and FG. (AS 1105.10)

For inventory at another subsidiary the firm performed inventory observations subsequent to year end. The firm did not test or in the alternative test any controls over the accuracy and completeness of the system-generated reports it used to test intervening transactions between the dates of its inventory observations and year end. (AS 1105.10)

The firm selected for testing controls over the existence of certain inventory held by external parties that the issuer used to manufacture its products. The firm did not identify and test any controls over the accuracy and completeness of the reports that the issuer obtained from the external parties and used in the operation of these controls. (AS 2201.39)