You are a senior auditor at CPA LLP. This year, your audit client is Burnaby Wholesalers Ltd, a Canadian public listed firm that distributes building materials, hardware, gardening, and related products to retail stores that service the "do-it-yourself" home improvement market. The audit engagement team includes you, one engagement partner, three junior auditors, and two senior auditors. The fiscal year-end under audit is December 31, 2021. Prior to the current fiscal year, Burnaby Wholesalers was audited by another public accounting firm, but the client changed auditors in early June 2021 because management was dissatisfied with the predecessor audit firm's high audit fee and lack of timely service. During the audit of Burnaby Wholesalers, you encounter the following scenarios. Please respond to each scenario and include your discussions in one PDF document.

5. Burnaby Wholesalers uses a computerized perpetual inventory system and the audit team members developed a set of test data to verify that the system operated as designed. The test data consisted of 10 purchase transactions randomly selected from the September purchases and 10 sales transactions also randomly selected from transactions recorded by the client during September 2020. The audit staff performed various substantive tests to verify the details of these transactions and then ran the 20 transactions through an offline version of the client's inventory system, noting how each transaction was processed. No exceptions were found and the conclusion was reached that the system operated as designed. Therefore, control risk over inventory transactions was assessed as low and concluded that year-end testing of the client's inventory could be restricted. Please comment on the appropriateness of such conclusion. (4 marks)