I have found 2 affects that incorrect inventory would have on net income. If beginning inventory is understated then the net income will be overstated and if the beginning inventory is overstated the net income will be understated. Are there other reasons that net income would be affected by incorrect valuation of inventory?

Ending Inventory misstated
Freight-in charges misstated
Purchases misstated

These will affect COGS, Net Income, and Retained Earnings.