As a senior auditor at CPA LLP, you are beginning your first audit of Burnaby Ltd. for the fiscal year ended December 31, 2021. The engagement team consists of you, the engagement partner, and three junior auditors. Burnaby Ltd. is a retail firm that is publicly listed in the TSX (Toronto Stock Exchange). The company was previously audited by another public accounting firm. During the audit, the following scenarios are encountered. Please respond to the scenario below and summarize your response in a report.

Burnaby Ltd. has a store located in Toronto. While doing the preliminary work for the audit, one of the junior auditors conducted analytical procedures on total sales, cost of goods sold, and inventory balance for the store in Toronto. The numbers are shown below. Since the prior year's audit is conducted by another audit firm, you have verified the beginning balance of the inventory to ensure its accuracy. After conducting analytical procedures, the junior auditor wrote in the working paper: based on the results of analytical procedures, the ending inventory for 2021 appears to be correct. Please indicate whether/why you agree or disagree with the junior auditor's judgements. 2021 2020 Sales $10,000,000 $9,000,000 Cost of goods sold 7,000,000 5,500,000 Inventory 1,800,000 6,200,000