Reference no: EM132602540

Question - You had to take over your senior staff assignment since she left this audit firm to join another audit firm during the peak period. According to the firm audit partner, you just need to complete the part on purchasing and trade payables.

You noted the following matters:

The purchasing manager fell ill and were on a long pay leave. The company find it difficult to recruit a temporary purchasing manager therefore it is up to the discretion of the user department so long they do not exceed the limit of amount spend according to the company's policy and procedures.

Exact duplicates of purchase orders are sent out to receiving department, account department and the original copy was filed in the user department.

A staff in the receiving department will match the purchase order with the delivery order. After which these documents will be submitted to the account department to process the payment for the supplier.

The accounts manager felt that there is no need to carry out reconciliation between the supplier statement with the accounts payable ledger especially now is a peak period.

a. State the implications of the above practices towards both the purchase and trade payables accounts.

b. Identify the substantive procedures for trade payables accounts.