Inventory NRV issues - Urgent 2284
IA last edited by
For an Inventory NRV/Costing deficiency of USD2 - 3 million:
- Do we need to restate the earnings for the last quarters or just state the deficiency in the annual report?
- Would it classify as a material weakness if the management identifies it and not the auditors?
- Is there any website where I can get specific literature on how to report and steps on how to manage any SOX deficiencies?
Denis last edited by
It depends - principally on the materiality to your overall numbers.
In my company a USD3 million error wouldn’t even be close to material so we would not need to disclose anything.
In relation to your sopecific points:
- should not need to restate unless it calls into question ‘true and fair’ view
- it makes a big difference whether management finds it rather than auditors as you have a case to say that management’s review procedures (i.e. controls) picked it up
- there was previously posted on this forum a link to a document that takles you through the defiiciency evaluation process. Source was, I think, AICPA but I may be worng.