Explorer

The issuer tracked certain of its inventory in a system that was hosted by a service organization. The firm used information from this system in its testing of this inventory but did not perform any procedures to evaluate the reliability of this information. (AS 2301.08)

The firm did not perform procedures beyond inquiry to test the amounts relieved from inventory and recorded in cost of goods sold. (AS 2301.08)

The issuer held certain inventory at a public warehouse. The firm did not perform sufficient procedures to test the existence of this inventory because it limited its procedures to confirming the quantities of this inventory with the public warehouse. (AS 2510.14)

The firm's approach for substantively testing the issuer's reserve for certain inventory was to develop an independent expectation based on an inventory aging. The firm did not perform any substantive procedures to test the reasonableness of the reserve for certain other inventory. (AS 2501.07)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiency below. The firm did not perform any procedures to test certain components of the issuer's calculation of the cost of certain inventory. (AS 2301.08)

The firm performed inventory observations at two business units subsequent to year end and performed roll-back procedures for the period from the date of the inventory observations to year end. For one of the business units the firm did not perform sufficient procedures to test the completeness of inventory at either business unit such as comparing quantities observed to the physical inventory summary. (AS 2301.08)

The firm limited its substantive procedures to test inventory at certain of the issuer's locations to analytical procedures because of its reliance on an entity-level control that the firm selected for testing. This entity-level control consisted of the review of the financial statement level information for each of these locations. The firm identified two significant deficiencies and one control deficiency that were relevant to the issuer's controls over inventory. The firm's reliance on the entity-level control was not supported because the firm did not consider the implications of these deficiencies on the effectiveness of the entity-level control. As a result for these locations the firm inappropriately limited its substantive testing to analytical procedures that provided little to no substantive evidence. (AS 2101.11 and .12; AS 2301.16)

The firm did not perform any substantive procedures to evaluate the reasonableness of the sales forecast the issuer used to develop the reserve for excess and obsolete inventory. (AS 2501.11)

The issuer intended to use a significant portion of its inventory on hand at year end to manufacture a product type it had sold at a significant loss during the year. The following deficiencies were identified: · The firm did not perform any substantive procedures to test whether this inventory was recorded at the lower of cost or net realizable value. (AS 2301.08)

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: · The firm did not perform any substantive procedures to test revenue and inventory for these business units. (AS 2301.08)

With respect to revenue and inventory for certain business units that were subject to less extensive audit procedures the following deficiencies were identified: · The firm did not perform any substantive procedures to test revenue and inventory for these business units. (AS 2301.08 and .13)

The firm did not perform any substantive procedures to test inventory at certain of the issuer's business units. (AS 2301.08)

With respect to certain business units that were subject to less extensive audit procedures the firm did not perform any substantive procedures to test revenue and inventory for these business units. (AS 2301.08)

With respect to inventory at certain business units that were subject to more extensive audit procedures the firm did not perform any substantive procedures to test the existence of this inventory. (AS 2301.08)

With respect to Inventory at one of the issuer's business units: The firm did not perform sufficient substantive procedures to test the existence of this inventory because the firm did not assess the effectiveness of the methods the issuer used to conduct its inventory counts. (AS 2510.09)

With respect to the issuer's work-in-process inventory at certain business units that the firm subjected to more extensive audit procedures the following deficiencies were identified: · The firm did not perform any procedures to test the existence of this work-in-process inventory. (AS 2301.08)

The issuer entered into arrangements to purchase inventory from certain suppliers. The firm did not evaluate whether these arrangements represented firm purchase commitments for which a loss should have been recognized under FASB ASC Topic 330 Inventory. Further the firm did not evaluate whether these arrangements created an unconditional performance obligation that would have required disclosure under FASB ASC Topic 440 Commitments. (AS 2301.08)

The firm did not perform any substantive procedures to test certain inventory. (AS 2301.08)

To test the existence of certain inventory the firm virtually observed the inventory at selected locations through video calls as of an interim date confirming only that inventory was present and performed certain roll forward procedures from the interim date to year-end. The following deficiency was identified: • The firm did not perform sufficient procedures to test the existence of this inventory because the firm's observation procedures were not suitable as the firm did not perform any test count procedures during the observations. Therefore these observations did not provide any evidence of the quantity and physical condition of the inventory. (AS 2510.09)

The firm did not perform any substantive procedures that addressed the accuracy of the allocation of the direct labor and overhead costs to this inventory. (AS 2301.08)

The firm did not perform any substantive procedures to test this inventory. (AS 2301.08)

The firm did not perform any substantive procedures to test whether this inventory was recorded at the lower of cost or net realizable value. (AS 2301.08)

The firm did not perform any substantive procedures to test whether the labor and overhead costs the issuer capitalized to inventory were appropriate. (AS 2301.08)

The firm did not perform substantive procedures to (1) test the existence and cost of certain inventory and (2) evaluate whether inventory was recorded at the lower of cost or net realizable value. (AS 2301.08)

The firm did not perform substantive procedures to evaluate the reasonableness of the allowance for slow moving inventory. (AS 2501.07)

The firm did not evaluate whether the cost of inventory was determined in accordance with the issuer's stated policy. (AS 2301.08)

The issuer's systems calculate inventory cost using various inputs. The firm did not perform any substantive procedures to test the inventory cost calculations. (AS 2301.08)

To test the existence of inventory at another location the firm did not perform substantive procedures beyond inquiry of management to evaluate whether an inventory reserve was warranted. (AS 2501.07)

The issuer held inventory at multiple locations. Inventory counts were performed subsequent to year end for each location. The firm obtained an issuer-prepared inventory roll-back analysis to perform tests of intervening transactions. The following deficiency was identified: · To test the completeness of intervening transactions related to inventory purchases for certain inventory the firm selected inventory purchases from bank statements and certain general ledger accounts that exceeded certain monetary thresholds. The firm did not perform any procedures to address the risk related to the completeness of inventory purchases below those thresholds. (AS 1105.27; AS 2510.12)

The issuer performed full physical counts of inventory at various locations before year end. For certain locations the firm observed the issuer's physical counts and performed independent test counts. The following deficiencies were identified: · The firm did not perform any procedures to test the existence of a type of work-in-process inventory at the locations observed. (AS 2301.08 and .11)

For certain locations the firm's substantive procedures to test the unit cost of inventory consisted of selecting a sample of items for testing. The following deficiencies were identified: · The firm did not perform procedures to evaluate certain differences it identified in its testing. (AS 2301.08 and .11)

For certain locations the firm's substantive procedures to test the unit cost of inventory consisted of selecting a sample of items for testing. The following deficiencies were identified: · The firm did not perform sufficient procedures to test the labor and overhead costs the issuer capitalized to inventory because its procedures were limited to comparing the costs to those capitalized in the prior year. (AS 2301.08 and .11)

For certain other locations the firm did not perform any substantive procedures to test the unit cost of inventory. (AS 2301.08 and .11)

The firm did not perform substantive procedures to test the issuer's inventory reserves. (AS 2501.07)

For certain other inventory the firm did not perform sufficient substantive procedures to test whether this inventory was recorded at the lower of cost or net realizable value because its procedures were limited to a year over year comparison of product-level gross margins. (AS 2301.08 and .11)

The firm observed the issuer's physical counts and performed independent test counts of inventory after year end. The following deficiencies were identified: · The firm did not perform any procedures to test the existence of a certain type of inventory. (AS 2301.08)

The firm's substantive procedures to test the unit cost of inventory consisted of selecting a sample of items for testing. For certain items in its sample the firm did not perform sufficient procedures to test the unit cost because its procedures were limited to comparing the recorded raw materials cost to supporting documentation for the most recent purchase. (AS 2301.08)

The firm's substantive procedures to test the unit cost of inventory consisted of selecting a sample of items for testing. For certain other items in its sample the firm did not perform any procedures to test the raw materials cost and/or the labor and overhead costs allocated to these items. (AS 2301.08)

The firm did not perform any procedures to evaluate whether certain inventory was recorded at the lower of cost or net realizable value. (AS 2301.08)

The firm performed independent test counts of inventory after year end. The following deficiencies were identified: · The firm did not compare the inventory listing it used to perform its substantive procedures to the recorded balance. (AS 2301.08)

The firm's substantive procedures to test the unit cost of inventory consisted of (1) selecting a sample of raw materials for testing and (2) testing the issuer's process for allocating labor and overhead costs to inventory. The following deficiencies were identified: · The firm did not perform sufficient procedures to test the raw materials cost because its procedures were limited to comparing the recorded cost to supporting documentation for the most recent purchase. (AS 2301.08)

The firm obtained the service auditor's reports for these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. These service organizations used sub-service organizations for certain functions. The following deficiencies were identified: · The firm selected for testing a complementary user control over change management. The firm did not perform sufficient procedures to test or test controls over the completeness of the population of changes that the firm used in its testing of this control because it did not evaluate whether the system was configured to track all changes made to the production environment. (AS 1105.10)

The firm's substantive procedures to test the unit cost of inventory consisted of (1) selecting a sample of raw materials for testing and (2) testing the issuer's process for allocating labor and overhead costs to inventory. The following deficiencies were identified: · The firm did not perform any procedures to evaluate whether inventory was recorded at the lower of cost or net realizable value. (AS 2301.08)

The firm did not perform any substantive procedures to test the issuer's reserve for excess and obsolete inventory. (AS 2501.07)

The firm did not perform any procedures beyond inquiry of management to test the existence of certain inventory held in offsite locations. (AS 2301.08)

The issuer held certain inventory at a public warehouse. The firm did not perform sufficient procedures to test the existence of this inventory because it limited its procedures to confirming the quantities of this inventory with the public warehouse. (AS 2510.14)

The firm observed physical inventory counts on various dates prior to year end. The firm did not perform any procedures to test the appropriateness of costs recorded by the issuer for certain inventory. (AS 2301.08)

The issuer held certain inventory at external warehouses. The firm did not perform sufficient procedures to test the existence of this inventory because it limited its procedures to confirming the quantities of this inventory with the external warehouses. (AS 2510.14)

The issuer performed cycle counts of inventory held at certain locations. The following deficiencies were identified: · The firm did not perform any substantive procedures to test the existence of inventory held at certain of these locations. (AS 2301.08)

The firm's substantive procedures to test the unit cost of inventory included selecting a sample of inventory items for testing. For certain items in its sample the firm did not perform procedures to test the cost of the raw materials included in the selected items. (AS 2301.08)