1 Consider age of inventory for a sample of items. Review:
(a) entity-prepared analyses of obsolescence, excess inventory turnover
(b) prior usage as indicated by perpetual inventory records, production and sales reports
(c) projected usage (requirements) as indicated by production requirements, sales forecasts, additions and deletions from sales catalogues, policy changes
(d) notices of engineering or production changes affecting material usage
(e) current, prior period and post period-end gross profit by product type,
(f) product performance, quality control, compliance with government regulations
(g) analysis of sales returns and allowances
(h) review any contract work-in-progress and ascertain whether any cost overruns experienced are billable under the contract
2 Consider need to make a provision for slow-moving inventory"