It had been two years since the last audit of the Hanning branch of Wendell Furniture Company, Inc. Wendell manufactures a budget-prices line of household furnishings and retails its line through a regional chain of furniture stores. The stores also sell Jeremy G. Manchester furniture as its better line. During the last audit, the Hanning branch had come under severe criticism for its inventory management. Inventory records were incomplete, and an inordinate amount of damage occurred to furniture in the branchs storage warehouse. When the auditors recently began a new audit of the branch they were surprised to discover evidence indicating that nothing had been done to correct the previous problems. Inadequate inventory accounting and careless handling of goods apparently had continued since the last audit. The lead auditor became disturbed by what he and the junior staff auditor found. The lead auditor asked his audit manager, Why perform an audit at all if nothing is going to be done to correct the problems we find?

Required: What aspects of the previous years audit process seems to have been neglected in this example? Explain.