You are in the process of planning the audit of Computer Logic, a supplier of integrated circuits (chips) and associated software for complex peripheral control functions, including mass storage, graphics, and data communications. These devices play an integral role in the operation of personal computers, workstations, and related peripherals such as disk drives.

The mass storage devices consist primarily of \(5^{1} / 4\)-inch disk drives for personal computers. The graphics chips have not been successfully marketed yet because of intense foreign competition. The Federal Trade Commission is presently investigating whether foreign firms are illegally dumping graphic chips in this country. Management of Computer Logic is confident that U.S. government sanctions against the foreign companies in the form of tariffs will permit the sale of a large inventory of the graphic chips. Sales in the communications segment have not yet begun, but the company has spent significant funds to develop a pair of chips that will combine the capabilities of a fax machine, modem, and an answering machine into two integrated circuits, each of which is about the size of a postage stamp. The company has capitalized the cost of some prototypes as inventory, but the final product is not expected to reach the market for 18 months.

How would this information affect your planning of the current-year audit?