The following is a copy of the auditors working paper for auditing inventory balances for the client

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The following is a copy of the auditor’s working paper for auditing inventory balances for the client New Millennium Ecoproducts. It shows the details of the net realizable value (NRV) tests. 

New Millennium Ecoproducts CLIENT: EY Period-end: Dec. 31, 2016 $ 000 F07 - NET REALIZABLE VALUE TESTING Currency/unit:


Required 

(a) Why does an auditor test for NRV? 

(b) Find the details of the inventory items selected for NRV testing. What is a “key item”? Explain how the auditor has decided whether or not the inventory items should be shown at NRV or cost. 

(c) Are any inventory items to be written down to NRV in this example? If so, by how much?

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Related Book For  book-img-for-question

Auditing A Practical Approach

ISBN: 978-1118849415

2nd Canadian edition

Authors: Fiona Campbell, Robyn Moroney, Jane Hamilton, Valerie Warren

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