b. When Jack walked through LBE's giant finished goods warehouse, he noticed that on the rack of row #56, many cartons were old and covered with dust. He stopped and asked about those cartons. Steve, the plant manager, told him that those are small appliances made in early 2014. Steve promises that eventually all the goods will be sold when LBE gives some price incentives to his distributors.

c. Joe is an experienced cost accoutant on your team. Joe reviewed LBE's cost accounting system which generates unit production costs for different products. He noticed that the costs of the firms electrical engineering department was treated as a periodic expense in previous fiscal years, but was treated as one source of manufacturing overheads in FY 2014.d

Question ... describe additional audit procedures that the audit team should perform in each situation. Please also highlight probably misstatements in LBE's financial statements.