Explorer

The issuer used an information technology ('IT') application to record revenue and inventory. The firm selected for testing certain automated and IT-dependent manual controls over revenue and inventory that used information generated or maintained by this application. The accuracy and completeness of this information depended on effective IT general controls ('ITGCs'). The firm's testing of ITGCs was not sufficient because it did not identify and test a complete population of operating system changes that could potentially affect change management controls over the application. As a result the firm's testing of the automated and IT-dependent manual controls was not sufficient. (AS 2201.46)

The sample sizes the firm used in certain of its substantive procedures to test revenue and inventory were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiency in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The issuer performed cycle counts of inventory held at certain locations. The following deficiencies were identified: · The firm did not identify and test any controls over the issuer's monitoring of its cycle-count program. (AS 2201.39)

The issuer performed cycle counts of inventory held at certain locations. The following deficiencies were identified: · The firm selected for testing certain cycle-count controls that it assessed as having a higher risk of failure. To test the design and operating effectiveness of these controls the firm selected a sample of cycle counts. The firm observed a small number of these counts and for certain of the remaining counts inquired of the issuer's personnel and inspected cycle-count documentation. The firm's procedures for the unobserved counts did not provide sufficient appropriate audit evidence given the assessed higher risk associated with these controls. (AS 2201.46)

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 selected for testing a control that consisted of the issuer's review and approval of the reserve for excess and obsolete inventory. The firm did not identify and test any controls over the accuracy and completeness of the reports that the issuer used in the operation of this control. (AS 2201.39)

The issuer used an information-technology (IT) system to process and record transactions related to revenue and inventory. The firm selected for testing 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 and .44)

The firm selected for testing certain automated and IT-dependent manual controls over revenue and inventory. The firm's approach to testing the accuracy and completeness of the data used in these controls depended on effective IT general controls including controls over user access. As a result of the deficiency in the firm's testing of the controls the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2201.46)

The firm selected for testing certain automated and IT-dependent manual controls over revenue and inventory. The firm's approach to testing the accuracy and completeness of the data used in these controls depended on effective IT general controls including controls over user access. As a result of the deficiency in the firm's testing of the controls the firm's testing of the automated controls was not sufficient because the firm did not test the configuration or programming of these controls or perform other procedures that would have provided sufficient appropriate audit evidence that these controls were designed and operating effectively. (AS 2201.42 and .44)

For two business units the issuer held certain inventory at locations owned by external parties. The firm performed confirmation procedures to test the existence of this inventory but did not maintain control over the confirmation requests because the issuer sent the requests. (AS 2310.28)

For certain inventory at another business unit the firm did not identify and test any controls over the issuer's process to record costs related to this inventory including the calculation of variances between standard and actual costs. (AS 2201.39)

The firm used data produced by the issuer in its substantive procedures to test the reserve for excess and obsolete inventory. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of certain of these data. (AS 1105.10)

For one business unit the firm selected for testing a control that included the issuer's reviews of the accuracy and completeness of reports that were used in the operation of the issuer's controls over revenue and inventory. The firm did not test the aspects of this control that addressed the accuracy and/or completeness of certain of these reports. (AS 2201.42 and .44)

The firm subjected certain other of the issuer's business units to less extensive audit procedures. With respect to revenue and/or inventory for these business units in determining the extent to which audit procedures should be performed the firm did not evaluate (1) the materiality of these business units (2) the nature of the recorded balances and/or (3) whether the risks of material misstatement 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 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)

The firm used certain data in its substantive testing of the reserve for excess and obsolete inventory but did not perform any procedures to test or test any controls over the accuracy and completeness of these data. (AS 1105.10)

The firm did not identify and evaluate the issuer's omission of a required disclosure under FASB ASC Topic 210 Balance Sheet related to major classes of inventory. (AS 2810.30 and .31)

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 selected for testing a control over the issuer's review of the reserve for excess and obsolete inventory. The firm did not identify and test any controls over the accuracy of certain data used in the operation of this control. (AS 2201.39)

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 selected for testing a control that included the issuer's review of journal entries related to inventory. The firm did not identify and test any controls over the accuracy and completeness of certain information used in the operation of this control. (AS 2201.39)

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 evaluate whether inventory was recorded at the lower of cost or market. (AS 2501.07)

The firm did not perform procedures to test the existence of inventory beyond comparing inventory counts from the issuer's inventory records to records from the issuer's warehouses. (AS 2510.09)

The firm did not perform procedures to test the inventory reserves beyond obtaining and reading a listing of obsolete items and the approval for the write off of certain inventory. (AS 2501.07)

The firm's approach for testing labor and overhead costs that the issuer allocated to inventory was to review and test management's process for estimating the amounts to capitalize in inventory. The firm did not test the accuracy and completeness of the data the issuer used to allocate these costs. (AS 1105.10)

In addition the firm's approach for testing labor and overhead rates was to develop an independent estimate. The firm did not test the accuracy and completeness of the system-generated reports used to develop its independent estimate. (AS 1105.10)

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 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 procedures to test or test any controls over the accuracy and completeness of certain data and reports used in its substantive testing of this inventory. (AS 1105.10)

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 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 procedures beyond inquiry to evaluate the difference between its independent expectation as a range and the issuer's recorded reserve. (AS 2501.26; AS 2810.13)

The issuer used multiple information technology (IT) applications to initiate process and record transactions related to revenue and related accounts and inventory. The firm selected for testing certain automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these applications. The accuracy and completeness of these data and reports depended on effective IT general controls (ITGCs). As a result of the following deficiencies in the firm's testing of ITGCs the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2201.46)

The firm selected for testing certain automated application controls related to inventory. The firm's testing of these controls was not sufficient because the procedures performed were substantive in nature and did not directly test the controls. (AS 2201.42 .44 and .B9)

The firm observed for a sample of locations physical inventory counts performed as of various interim dates. The firm did not perform sufficient procedures to extend its audit conclusions on the existence of inventory for the periods between its interim testing and year end because the firm limited its procedures to agreeing inventory movements between the interim dates and year end to system-generated reports. (AS 2301.45)

The issuer used multiple information technology (IT) applications to initiate process and record transactions related to revenue and related accounts and inventory. The firm selected for testing certain automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these applications. The accuracy and completeness of these data and reports depended on effective IT general controls (ITGCs). - The firm did not sufficiently test change management controls because the firm did not consider all program changes in making its selections for testing. (AS 2201.42 and .44)

The issuer used multiple information technology (IT) applications to initiate process and record transactions related to revenue and related accounts and inventory. The firm selected for testing certain automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these applications. The accuracy and completeness of these data and reports depended on effective IT general controls (ITGCs). - The firm did not sufficiently test privileged access controls because the firm did not (1) consider all privileged access users in making its selections for testing and (2) test the procedures that control owners performed to evaluate the appropriateness of access. (AS 2201.42 and .44)

The issuer used multiple information technology (IT) applications to initiate process and record transactions related to revenue and related accounts and inventory. The firm selected for testing certain automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these applications. The accuracy and completeness of these data and reports depended on effective IT general controls (ITGCs). - The firm did not sufficiently test the periodic user account review control because the firm did not sufficiently evaluate whether the control as designed could effectively prevent or detect a material misstatement because the firm did not consider whether every user was assigned to an approver or the appropriateness of permissions granted to roles. (AS 2201.42 and .44)

The issuer used multiple information technology (IT) applications to initiate process and record transactions related to revenue and related accounts and inventory. The firm selected for testing certain automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these applications. The accuracy and completeness of these data and reports depended on effective IT general controls (ITGCs). - The engagement team did not identify and test any controls over the accuracy and completeness of user access lists used in the operation of the control including whether all users were included and all access roles for each user were listed for review. (AS 2201.39)

The firm did not evaluate whether the issuer consistently applied its basis for stating inventories in conformity with FASB ASC Topic 330 Inventory. (AS 2810.30)

The firm did not identify and appropriately address a departure from GAAP related to the issuer's omission of a disclosure required by FASB ASC Topic 330. (AS 2810.30 and .31)

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 issuer's year-end inventory included work-in-progress and finished goods. The firm did not test the accuracy and completeness of issuer information the firm used to test inventory costs. (AS 1105.10)

The firm did not perform sufficient procedures to test the issuer's impairment analysis of inventory because it limited its procedures to obtaining the issuer's impairment analysis and concluding the result of the analysis was consistent with historical margins. (AS 2501.07)

The component held inventory at multiple locations. For one location the firm selected for testing two controls over inventory that consisted of periodic cycle counts and management's review and approval of adjustments to the perpetual inventory records resulting from those counts. The firm did not identify and test any controls over the accuracy and completeness of the data derived from the component's inventory system that was used in the operation of these controls. (AS 2201.39)

The firm's substantive procedures to test inventory at this location utilized certain data from the component's inventory system. The firm did not test or in the alternative identify and test controls over the accuracy and completeness of these data as discussed above. (AS 1105.10)

The firm selected for testing a control over inventory that consisted of management's review of standard versus actual costs used by the issuer to record inventory. The firm did not identify and test any controls over the accuracy and completeness of a report used in the operation of this control. (AS 2201.39)