Lethman, a listed company that manufactures wooden, has been an audit client of your firm for several years. As an audit senior, you are involved in the Lethman audit for the first time. The company operates a perpetual inventory counting system. While looking at the prior year audit files, you note that numerous misstatements were identified by the audit team in respect of purchases cutoff, prompting adjustments to be made in last year\'s financial statements.

Required: Where a company uses a perpetual inventory counting system, analyse the audit work that auditors would carry out to satisfy themselves that inventory was fairly stated.