Explorer

The firm did not identify and test any controls over the issuer's evaluation of the lower of cost or net realizable value for certain inventory. (AS 2201.39)

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 identify and test any controls over the issuer's allocation of labor and overhead costs to inventory. (AS 2201.39)

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 identified various control deficiencies related to inventory. The firm identified and tested compensating controls that it believed would mitigate certain of these deficiencies but did not identify that these controls were dependent on the operating effectiveness of the deficient controls. (AS 2201.68)

The issuer valued inventory for one of its segments using the last-in first-out (LIFO) method and determined its quarterly LIFO adjustments based on the LIFO inventory balances for each of its inventory categories. The following deficiencies were identified: · The firm identified a control deficiency related to the issuer's quarterly review of the LIFO adjustment for each inventory category. The firm identified and tested a compensating control that it believed mitigated this deficiency but did not identify that this compensating control did not operate at the inventory-category level and involved the review of gross margins before they were adjusted for LIFO. (AS 2201.68)

The issuer valued inventory for one of its segments using the last-in first-out (LIFO) method and determined its quarterly LIFO adjustments based on the LIFO inventory balances for each of its inventory categories. The following deficiencies were identified: · The firm's substantive procedures to test the issuer's year-end LIFO adjustment consisted of performing substantive analytical procedures. The firm did not determine whether the expectations it used in these analytical procedures were based on predictable relationships. (AS 2305.13 and .14)

The issuer valued inventory for one of its segments using the last-in first-out (LIFO) method and determined its quarterly LIFO adjustments based on the LIFO inventory balances for each of its inventory categories. The following deficiencies were identified: · The firm's substantive procedures to test the issuer's year-end LIFO adjustment consisted of performing substantive analytical procedures. The expectations the firm used were not sufficiently precise to identify differences that could be potential material misstatements individually or in the aggregate because the data used to develop the expectations did not address the issuer's determination of LIFO adjustments at the inventory-category level. (AS 2305.17)

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 firm did not evaluate whether inventory was recorded at the lower of cost or market. (AS 2501.07)

The firm did not evaluate the assumptions used by the issuer to estimate the reserve for obsolescence. (AS 2501.07)

The firm did not perform sufficient inventory test count procedures because it did not test (1) inventory transactions between the date of the count and year end and (2) the completeness of the issuer's inventory. (AS 2510.09 and .12)

The firm's approach to substantively testing the issuer's reserve for excess and obsolete inventory was to review and test management's process. The firm did not perform any substantive procedures to test or test controls over the accuracy and completeness of certain data used by the issuer to estimate the inventory reserves. (AS 1105.10; AS 2501.11)

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)

The firm's substantive procedures to test inventory included observing inventory after year end and obtaining a roll-back schedule from the date of the inventory observation to the balance sheet date. The firm did not test certain types of transactions in this schedule. (AS 2510.12)

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

The firm selected for testing controls that consisted of the issuer's review of inventory. The firm did not identify and test any controls to address whether inventory was recorded at the lower of cost or net realizable value. (AS 2201.39)

The issuer recognized an allowance for slow-moving and obsolete inventories that included a general reserve. The firm did not evaluate the reasonableness of the significant assumptions the issuer used to develop the general reserve. (AS 2501.16)

The issuer's products had expiration dates and the issuer determined that a reserve for excess or obsolete inventory was not necessary. In its testing of the process including assumptions used by management to evaluate the need for an inventory reserve the firm did not evaluate whether the issuer's products could be sold at or above cost prior to their expiration dates. (AS 2501.11)

The issuer's products consisted of various categories and each category included numerous individual parts. The issuer determined that a reserve for excess or obsolete inventory was not necessary. In its testing of the process including assumptions used by management to evaluate the need for a reserve for excess and obsolete inventory the firm only performed procedures at the product level and did not consider individual parts for excess quantities or obsolescence. (AS 2501.11)

To test the existence of inventory at a certain location the firm performed test counts on a sample of items. The firm was unable to count certain items. For certain other items the firm identified differences. The firm did not evaluate whether the inability to count certain items represented a misstatement and if so the potential effect on the evaluation of its sample. Further the firm did not (1) evaluate the nature and cause of the differences identified in its sample; (2) project the differences to the remaining inventory population; and (3) evaluate whether the projected differences were material to the financial statements. (AS 2315.25 .26 and .27)

To test the existence of inventory at another location the firm performed a virtual observation of inventory but did not perform any test counts. (AS 2510.09)

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 firm did not determine the likely sources of potential misstatements associated with certain inventory to identify and test controls that addressed the risks of misstatement for the relevant assertions for this inventory. (AS 2201.30 and .39)

The issuer engaged an external specialist to estimate the quantity of certain inventory. The firm did not obtain an understanding of the methods and assumptions used by the external specialist to develop the estimate. (AS 1210.12)

The firm did not perform any procedures to test the existence of certain inventory. (AS 2510.09)

The issuer engaged a specialist to determine the valuation of certain inventory. The firm did not perform substantive procedures to test the reserve for this inventory beyond obtaining and reading the valuation report prepared by the company's specialist. Further the firm did not perform any procedures with respect to its use of the work of the company's specialist as audit evidence. (AS 1105.A1 - .A10; 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 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: · The firm did not perform any procedures to test the completeness of intervening transactions related to sales of that inventory. (AS 2501.12)

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: · For certain of the above inventory the firm did not perform any procedures to test the completeness of the intervening transactions unrelated to purchases or sales. (AS 2510.12)

Certain of the issuer's inventory was subject to weekly cycle counts and the issuer used system-generated reports to determine the frequency with which each item should be counted and to select the items that should be counted each week. The firm did not perform any substantive procedures to test or in the alternative test any controls over the accuracy and completeness of these reports. As a result the firm did not obtain sufficient appropriate audit evidence that the cycle-count procedures the issuer used for this inventory were sufficiently reliable to produce results substantially the same as those that would have been obtained by a count of all items each year. (AS 1105.10; AS 2510.11)

The firm did not identify and test any controls that addressed the issuer's determination of the cost of its inventory and whether the amounts relieved from inventory and recorded to cost of goods sold were accurate. (AS 2201.39)

The firm selected for testing the issuer's daily cycle-count control over the existence of this inventory. The small number of cycle-counts that the firm selected for testing did not provide sufficient appropriate audit evidence in light of the frequency of the operation of the control. (AS 2201.46)

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

Due to the deficiency related to the cycle-count control discussed above the firm did not obtain sufficient appropriate audit evidence that the cycle-count procedures the issuer used for this inventory were sufficiently reliable to produce results substantially the same as those that would have been obtained by a count of all items each year. (AS 2510.11)

The firm used reports produced by the issuer in its substantive procedures to test (1) the reserve for excess and obsolete inventory and (2) whether finished goods inventory was recorded at the lower of cost or net realizable value. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of these reports. (AS 1105.10)

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)

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: · For certain inventory the firm did not apply appropriate tests of intervening transactions between the date of the issuer's counts and year end. (AS 2510.12)

For certain other locations the firm did not perform any procedures to test the existence of inventory. (AS 2510.09)

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 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 any procedures to test or test controls over the accuracy and completeness of certain issuer-produced information used in its substantive testing. (AS 1105.10)

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 inventory the firm's approach for substantively testing the reserve for excess and obsolete inventory was to test the issuer's process. The following deficiencies were identified: · The firm did not sufficiently evaluate whether the method used by the issuer to develop the reserve was appropriate because it did not evaluate whether the issuer's reserve took into account the issuer's forecasted sales. (AS 2501.10)

For certain inventory the firm's approach for substantively testing the reserve for excess and obsolete inventory was to test the issuer's process. The following deficiencies were identified: · The firm did not sufficiently evaluate the reasonableness of certain significant assumptions used by the issuer to estimate the reserve for excess and obsolete inventory because its procedures were limited to inquiry of management and performing a sensitivity analysis that indicated that if certain alternative assumptions were used the reserve would change by a significant amount. (AS 2501.16)

For certain inventory the firm's approach for substantively testing the reserve for excess and obsolete inventory was to test the issuer's process. The following deficiencies were identified: · The firm did not perform any procedures to test or test controls over the accuracy and completeness of an issuer-produced report the firm used in its substantive testing of the reserve for excess and obsolete inventory. (AS 1105.10)

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)