The market for computers and related products is extremely competitive. KCN competes with large retailers of computers,
Question:
The market for computers and related products is extremely competitive. KCN competes with large retailers of computers, such as Dell, Hewlett-Packard, and Apple. The company also competes with other value-added resellers who provide computers and software products and consulting services directly to customers. To effectively compete, the company must be able to obtain inventories of state-of-the-art equipment on a timely basis. Because the company does not have the buying power of some of its other competitors, it generally must charge a higher price for its products. Its customers are willing to pay the higher price because of the high level of expertise and service that the company provides.
As the lead for this audit, what red flags do you identify with KCN's business objective as it relates to inventory? What Accounts are impacted by these red flags? How do you adjust your audit plan?