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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › aUDIT RISK
There have been a significant number of sales returns made subsequent to the year end.
In the auditors response :, the reason for the increased level of returns should be discussed with management. This will help to assess if there are underlying issues with the net realizable value of inventory.
What possibly can be the issues with nrv if there are sales returns ?
Faulty inventory.
so it should be valued at nrv right
All inventory should be valued at the lower of cost and nrv. Depending on how faulty the goods are, the nrv could eb above or below cost.