One of the problems faced by the auditors in their verification of inventory is the risk that slow-moving and obsolete items may be included in the goods on hand at the balance sheet date. In the event that such items are identified in the physical inventory, their carrying value should be written down to an estimated scrap value or other recoverable amount.
Prepare a list of the auditing procedures that the auditors should employ to determine whether slow-moving or obsolete items are included in the physical inventory.