During the course of an interoffice quality review, it was discovered that the auditors had failed to consider whether inventory costs of a wholesale client exceeded their market value. The review took place six months after the audit report had been issued. Some prices had apparently been falling near year end. Inventory is a major item in the financial statements, but the auditor does not know whether the market price declines were material.

Required
a. What procedures could the auditor now perform to resolve this audit problem?
b. What should the auditor do if it turns out that inventory was materially overstated?