Valuation of inventory

As Per AS 1 "Disclosure of Accounting Policies" Every change in Accounting policy is permitted only when such change is :

i) permitted by law ii) required by statute iii) such change will show more appropriate working of the said item & reflect more true & fair view of Financial Statements  

As a statutory auditor you should comment on such change and should also comment on the appropriateness of accounting method followed for valuation of closing stock.

Also it is the responsibility of the management to disclose the material effect of such change in current year as well as in future periods.

Regards