Explorer

The firm subjected certain of the issuer's business units to less extensive audit procedures. With respect to revenue and inventory for these business units the following deficiencies were identified: · In determining the extent to which audit procedures should be performed the firm did not evaluate (1) the materiality of these business units and (2) whether the risks of material misstatement including a fraud risk related to certain revenue that the firm identified for the business units subject to more extensive audit procedures also applied to these business units. (AS 2101.11 and .12)

With respect to revenue and inventory for certain business units that were subject to less extensive audit procedures the following deficiencies were identified: · In determining the extent to which audit procedures should be performed the firm did not evaluate (1) the materiality of these business units in the current year and (2) whether the risks of material misstatement including the fraud risk related to this revenue that the firm identified for the business units subject to more extensive audit procedures also applied to these business units. (AS 2101.11 and .12; AS 2201.B10)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. For certain business units the issuer used an IT system to initiate process and record transactions related to inventory and revenue. In its testing of controls over these accounts the firm tested various automated controls that used data generated or maintained by this IT system. The firm selected for testing a control over change management for this system but did not evaluate whether this control was designed to address all program changes. (AS 2201.42)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. The firm's substantive procedures to test the unit cost of this inventory consisted of selecting a sample of items for testing. The firm did not perform sufficient procedures to test the unit cost because it inspected supporting documentation for only a portion of the quantity of these items held at year end. (AS 2301.08)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. The firm's substantive procedures to test the unit cost of this inventory consisted of selecting a sample of items for testing. The firm did not perform any substantive procedures to test an input used in determining the cost of this inventory. (AS 2301.08)