You are the auditor of John Benson Ltd., a manufacturer of a variety of paper and cardboard stationery products. Product lines range from everyday items that are low value but high volume to more expensive and specialized items that are produced for niche markets. Closing inventory includes finished goods, work in process, and raw materials.
You have completed the inventory count procedures and are happy that the inventory quantities are correct. You are also happy that the cost of each product line has been correctly calculated. You are now focused on assessing the net realizable value to establish if there is any need for an inventory writedown.
You have assessed a possible risk related to the net realizable value of work in process and finished goods.

Required Discuss the procedures that you should carry out to satisfy yourself that the writedown to ensure inventory is recorded at the lower of cost and net realizable value is adequate.