This paper is concerned with direct and inverse scattering by a locally perturbed infinite plane (called a locally rough surface in this paper) on which a Neumann boundary condition is imposed. A novel integral equation formulation is proposed for the direct scattering problem which is defined on a bounded curve (consisting of a bounded part of the infinite plane containing the local perturbation and the lower part of a circle) with two corners and some closed smooth artificial curve. It is a nontrivial extension of our previous work on direct and inverse scattering by a locally rough surface from the Dirichlet boundary condition to the Neumann boundary condition [SIAM J. Appl. Math., 73 (2013), pp. 1811{1829]. For the Dirichlet boundary condition, the integral equation obtained is uniquely solvable in the space of bounded continuous functions on the bounded curve, and it can be solved eficiently by using the Nystrom method with a graded mesh. However, the Neumann condition case leads to an integral equation which is solvable in the space of squarely integrable functions on the bounded curve rather than in the space of bounded continuous functions, making the integral equation very dificult to solve numerically with the classic and eficient Nystrom method. In this paper, we make use of the recursively compressed inverse preconditioning method developed by Helsing to solve the integral equation which is eficient and capable of dealing with large wave numbers. For the inverse problem, it is proved that the locally rough surface is uniquely determined from a knowledge of the far-field pattern corresponding to incident plane waves. Moreover, based on the novel integral equation formulation, a Newton iteration method is developed to reconstruct the locally rough surface from a knowledge of multiple frequency far-field data. Numerical examples are also provided to illustrate that the reconstruction algorithm is stable and accurate even for the case of multiple-scale profiles. [ABSTRACT FROM AUTHOR]