Explorer

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. 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 a result of the deficiency in the firm's testing of the ITGC the firm's testing of these automated controls was not sufficient. (AS 2201.46)

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 inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm selected for testing an automated control over inventory costing. The firm did not sufficiently test the design and operating effectiveness of this control as it limited its testing to only certain scenarios without identifying and evaluating all relevant configurations. (AS 2201.42 and .44)

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 inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm selected for testing an automated control over inventory costing. The firm did not identify that this control was not designed to address whether inventory was valued in accordance with the issuer's policy. (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. For certain inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm did not identify and test any controls over an input the issuer used in determining the cost of inventory. (AS 2201.39)

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 inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The issuer performed cycle counts of inventory and the issuer's cycle-count policy required inventory to be counted at specific frequencies during the year. The firm selected for testing controls that consisted of the issuer's review of cycle-count results. The firm did not test the aspects of one of these controls that addressed whether inventory counts were performed in accordance with the issuer's designated count frequency in its cycle-count policy. (AS 2201.42 and .44)

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 inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The issuer performed cycle counts of inventory and the issuer's cycle-count policy required inventory to be counted at specific frequencies during the year. The firm selected for testing controls that consisted of the issuer's review of cycle-count results. 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's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. For certain inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm identified exceptions in its substantive testing of the existence of inventory but did not evaluate the effect of these exceptions on the effectiveness of the issuer's cycle-count controls. (AS 2201.B8)

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)

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 approach to substantively test certain of the issuer's reserve for excess and obsolete inventory was to develop an independent expectation of the estimate. The firm did not perform procedures to demonstrate it had a reasonable basis for an assumption and the method used to develop its independent expectation. (AS 2501.22)

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 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 procedures beyond inquiring of management to test intervening transactions between year end and the date of its inventory observations. (AS 2510.12)

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 did not perform any procedures to test or test controls over the accuracy and completeness of certain information produced by the issuer that the firm used in its testing of the net realizable value of certain other inventory. (AS 1105.10)

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 performed independent test counts of inventory after year end. The following deficiencies were identified: · The firm did not apply tests of intervening transactions in inventory between year end and the date of its test counts. (AS 2510.12)

The issuer used multiple service organizations to host and/or maintain an information-technology (IT) system that the issuer used to initiate process and record transactions related to revenue and related accounts inventory and long-lived assets at certain business units. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by this IT system. As a result of the deficiencies in the firm's testing of IT general controls (ITGCs) discussed below the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2201.46)

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 complementary user controls over the issuer's granting and monitoring of user access to this system but did not evaluate the specific review procedures that the control owners performed to determine whether to grant access to users or whether access that had been previously approved continued to be appropriate. (AS 2201.42 .44 and .B22)

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 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 did not perform procedures beyond inquiry to evaluate whether the issuer had implemented certain other complementary user controls. (AS 2201.39 and .B22)

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 did not obtain an understanding of or test any relevant controls at certain sub-service organizations. (AS 2201.39 and .B19)

For inventory at two business units which was affected by the ITGC audit deficiencies discussed above the following additional deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's performance of physical inventory counts. The firm did not test the aspects of these controls that addressed whether an accurate and complete count had occurred. (AS 2201.42 and .44)

For inventory at two business units which was affected by the ITGC audit deficiencies discussed above the following additional deficiencies were identified: · The firm did not perform any procedures to evaluate the issuer's classification of certain items as inventory. (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 procedures to test or test controls over the accuracy and completeness of certain issuer-produced information that it used in its testing of the allocated labor and overhead costs. (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 procedures beyond inquiring of management to evaluate the reasonableness of certain significant assumptions used by the issuer to allocate overhead costs. (AS 2501.16)

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 issuer estimated the cost of certain inventory using various significant assumptions. The firm's approach for substantively testing the valuation of this inventory was to test the issuer's process. The following deficiencies were identified: · The firm's approach for evaluating the reasonableness of certain significant assumptions was to develop expectations of these assumptions. The firm did not perform sufficient procedures to demonstrate it had a reasonable basis for its expectations because it limited the development of these expectations to the results of its tests of certain varieties of inventory items. (AS 2501.16)

The issuer estimated the cost of certain inventory using various significant assumptions. The firm's approach for substantively testing the valuation of this inventory was to test the issuer's process. The following deficiencies were identified: · The firm did not perform procedures to test or test controls over the accuracy and/or completeness of certain issuer-produced information that the firm used in its substantive testing of inventory. (AS 1105.10)

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

The issuer recorded a reserve for excess and obsolete inventory. The firm did not evaluate the reasonableness of the reserve percentages and product lives used in the issuer's determination of the portion of the reserve for excess inventory. Further the firm did not evaluate the appropriateness of fully reserving for certain items at the end of their assumed product lives when those items continued to be sold during the year. (AS 2501.11; AS 2810.03)

With respect to the portion of the reserve for obsolete inventory the firm did not evaluate the reasonableness of the issuer's policy to fully reserve for items with no sales in the past 24 months. Further the firm did not evaluate the effect of fully reserved items that were sold during the year on that policy. (AS 2501.11; AS 2810.03)

The firm selected for testing controls over inventory that consisted of (1) the performance of at least a certain number of counts per year for inventory at one location (2) annual testing of inventory at a second location at a point in time during the year and (3) inventory cycle counting that requires 100 percent coverage for inventory at the second location that began after the annual testing was completed. The firm did not test whether these controls were appropriately designed to ensure that the procedures over inventory quantities were sufficiently reliable to produce results substantially the same as those which would be obtained by a count of all items each year. (AS 2201.42 and .44)

The issuer reported a reserve for excess and obsolete inventory. The firm selected for testing a control consisting of the issuer's review of the reserve for the inventory. The firm did not evaluate the specific review procedures that the control owners performed to evaluate the reasonableness of the assumptions used to determine the reserve for excess inventory. (AS 2201.42 and .44)

The issuer reported a reserve for excess and obsolete inventory. The firm selected for testing a control consisting of the issuer's review of the reserve for the inventory. The firm did not identify and test any controls over the accuracy and completeness of inventory items included in the obsolescence reserve. (AS 2201.39)

The firm's approach for substantively testing the excess and obsolete inventory reserve for certain inventory was to test the issuer's process used to develop the reserve. The firm did not evaluate whether the issuer had a reasonable basis for significant assumptions used to develop the reserve for excess inventory and whether those assumptions were consistent with historical or recent experience taking into account changes if any in conditions affecting the issuer. (AS 2501.16)

The firm's approach for substantively testing the excess and obsolete inventory reserve for certain inventory was to test the issuer's process used to develop the reserve. The firm did not perform substantive procedures to test or identify and test any controls over the accuracy and completeness of inventory items included in in the obsolescence reserve. (AS 1105.10)

The firm did not evaluate whether the accounting for inventory was in conformity with GAAP including whether capitalizable costs were allocated to ending inventory in conformity with FASB ASC Subtopic 330-10-30 Inventory — Overall — Initial Measurement. (AS 2301.08)

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 firm's approach for substantively testing the issuer's reserve for excess and obsolete (E&O) inventory was to develop an independent expectation of the estimate. The firm did not sufficiently evaluate the reasonableness of the estimate because the firm's independent expectation was limited to inventory items with no changes in quantities on hand during the year and did not consider whether there were other inventory items that required an E&O reserve. Further the firm's procedures to evaluate differences it identified from its independent expectation were limited to inquiry of management. (AS 2501.09 .10 and .12)

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 firm observed physical inventory counts on various dates prior to year end. The firm did not perform procedures to test intervening transactions between the dates of its inventory observations and the issuer's year end beyond obtaining a reconciliation of inventory balances from the count dates to year end. (AS 2510.12)

The firm observed physical inventory counts on various dates prior to year end. The firm did not perform any procedures to test the existence of certain inventory. (AS 2510.09)

The firm observed physical inventory counts on various dates prior to year end. The firm did not perform any procedures to test the valuation of inventory reserves. (AS 2501.07)

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 reported a reserve for excess and obsolete inventory. The firm did not perform procedures to test this reserve beyond performing recalculations of certain amounts. (AS 2501.07)