Based on my analysis from the third quarter 10-Q’s comparative common-sized financial statements, and the earnings quality, I think there are three aspects should be attention-directing for the auditor in planning and performing the audit.
First, double checking the inventory. As a retailer company, inventories are the most important assets that account for more than half of the pier 1’s assets and they are the main resource of revenue, so this account has high risk and should be kept on a stable level. However, as I analysis it before, the inventories were 32 million lower for the nine month ended Nov.28, 2015. The auditor should use relative inventory audit procedures such as the physical inventory count, cutoff analysis to make sure that
First, double checking the inventory. As a retailer company, inventories are the most important assets that account for more than half of the pier 1’s assets and they are the main resource of revenue, so this account has high risk and should be kept on a stable level. However, as I analysis it before, the inventories were 32 million lower for the nine month ended Nov.28, 2015. The auditor should use relative inventory audit procedures such as the physical inventory count, cutoff analysis to make sure that