Explorer

The issuer calculated a reserve for excess and obsolete inventory by applying established percentages to each inventory aging category. The following deficiencies were identified: · The firm used these data in its substantive procedures but did not perform any procedures to test or test any controls over the accuracy of these data. (AS 1105.10)

The firm did not perform any substantive procedures to test certain adjustments the issuer made to its inventory. (AS 2301.08)

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

To test the pricing of inventory the firm selected items for testing that exceeded a monetary threshold. The firm did not perform any procedures to test the remaining inventory population. (AS 1105.27; AS 2301.08)

The firm did not sufficiently test whether inventory was stated at the lower of cost or net realizable value at year end because it limited its procedures to testing certain inventory that was sold during the two months after year end. (AS 1105.27)

The firm's substantive procedures to test the unit cost of certain inventory included selecting a sample of inventory items for testing. 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 and .11)

The firm's approach for substantively testing the reserve for excess and obsolete inventory was to develop an independent expectation as a range. The following deficiencies were identified: · The firm did not perform substantive procedures beyond inquiry to demonstrate that it had a reasonable basis for its assumption that certain items did not require a reserve including considering that the issuer recorded a reserve for this inventory during the financial reporting close process. (AS 2501.22; AS 2810.03)

The firm's approach for substantively testing the reserve for excess and obsolete inventory was to develop an independent expectation as a range. The following deficiencies were identified: · The firm did not perform substantive procedures beyond inquiry to demonstrate that it had a reasonable basis for certain other assumptions. (AS 2501.22)

The firm's approach for substantively testing the reserve for excess and obsolete inventory was to develop an independent expectation as a range. The following deficiencies were identified: · The firm did not perform any substantive procedures to demonstrate that its independent expectation as a range encompassed only reasonable outcomes and was supported by sufficient appropriate evidence. (AS 2501.25)

The issuer's year-end inventory included work-in-progress and finished goods. The firm did not obtain an understanding of and test the method the issuer used to allocate inventory costs to work-in-progress and finished goods. (AS 2301.08)

The firm did not perform any substantive procedures to test or in the alternative identify and test controls over the accuracy of certain inputs obtained from the issuer that the firm used to test work in progress inventory quantities. (AS 1105.10)

The firm did not perform any substantive procedures to test a portion of costs of goods sold. (AS 2301.08)

To test the existence of raw materials inventory the firm observed the issuer's physical inventory counts at select locations. The firm did not perform sufficient procedures to test the existence of this inventory at year end because the firm's observation procedures were not suitable as the locations it selected for testing had no quantities of raw materials inventory on hand at the time of the observations. Therefore these observations did not provide any evidence of the quantity and physical condition of any raw materials inventory. (AS 2510.09)

To test the existence of raw materials inventory the firm observed the issuer's physical inventory counts at select locations. The firm did not perform any substantive procedures to test the existence of the remaining population of raw materials inventory. (AS 2301.08)

The firm did not perform any substantive procedures to test the existence of work-in-progress inventory. (AS 2510.09)

Certain inventory representing a significant proportion of current assets was held by an outside custodian. 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 custodian. (AS 2510.14)

The firm did not perform procedures to test the raw material costs in inventory at year end. (AS 2301.08 and .11)

The firm's sample was not representative of the population because the firm selected inventory items that had a recorded reserve but did not select any items that did not have a recorded reserve. (AS 2315.24)

During the year the issuer recorded certain revenue from consignment arrangements whereby revenue was recognized and inventory was relieved when products were shipped to customers by resellers. The firm did not perform any procedures to evaluate the reliability of the information that it obtained from resellers and used to test this revenue and the inventory held on consignment. (AS 1105.04 and .06)

The firm did not sufficiently test a component of the issuer's reserve for excess and obsolete inventory because its procedures were limited to recalculating the reserve using information obtained from the issuer's external warehouse manager without evaluating the reliability of this information. (AS 1105.04 and 06)

At two of the issuer's locations the issuer valued certain inventory at standard cost and capitalized certain labor and overhead costs to inventory based on the difference between the actual costs incurred and the costs recorded at standard. The firm did not perform sufficient substantive procedures to test the capitalized variance recorded by the issuer at year end because it did not evaluate whether the amount the issuer used to calculate the capitalized variance represented the actual difference between actual and standard costs. (AS 2301.08)

At one of these locations the issuer valued certain inventory using the last-in first-out (LIFO) method. The firm used certain information provided by the issuer to test the LIFO reserve but did not perform any procedures to test or test any controls over the accuracy of this information. (AS 1105.10)

The firm did not perform any substantive procedures to test certain inputs used by the issuer to determine the cost of certain inventory. Further the firm did not perform sufficient substantive procedures to test the allocation of overhead costs to this inventory because it limited its procedures to comparing costs and production to the prior year without performing procedures to determine whether prior year costs and production would be representative of the current year. (AS 2301.08)

The issuer maintains inventory at multiple locations and performs physical inventory counts at year end. The following deficiencies were identified: · For one location the firm did not (1) project the misstated results of its sample to the items from which the sample was selected and (2) consider the nature and cause of misstatements identified in the sample of items tested to determine whether there could be additional errors. (AS 2315.26 and .27)

The firm did not test shipping terms of inventory purchased from a foreign supplier for inventory received subsequent to year end. (AS 2301.08)

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

The firm did not perform sufficient procedures to test the existence of certain inventory at year end. Specifically the firm's observation procedures were not suitable because they did not provide any evidence of the quantity and physical condition of the inventory. (AS 2510.09)

To test the existence of inventory the firm selected a sample of items biased towards high-dollar value individual items. The firm did not perform any procedures to test the remaining population of inventory. (AS 2315.24)

To test the existence of inventory the firm selected a sample of items biased towards high-dollar value individual items. The firm did not perform any procedures to test the cost of inventory. (AS 2301.08)