Your firm is the auditor of Newtown Ltd., and you have been asked to suggest audit work you will carry out in verifying accounts payable and accruals at the company’s year end of December 31, 2016. You attend the inventory count at the year end. The company operates from a single site and all raw materials for production are received by the receiving department. When the materials are received, they are checked for quantity and quality against the shipping document and purchase order, and a multi-copy receiving report is made out and signed by the store’s manager. If there are any problems with the raw materials, then a discrepancy note is raised that gives details of any problems (such as incorrect quantities or faulty materials). The accounts payable department receives the suppliers’ invoices, checks them against the purchase order and receiving report, and posts them to the purchases ledger. At the end of each month, payments are made to suppliers. The purchases journal is maintained on a computer. The main sundry creditors and accruals at the year end include: 

• wages accruals 
• payroll tax 
• time-dependent accruals, such as loan interest, telephone, heating and lighting, and other expenses that are paid in arrears 

Most employees’ wages are paid weekly in arrears. 

Required 

(a) Describe how you would ensure that purchases cut-off has been correctly performed at the year end. 

(b) Describe how you would ensure that sundry creditors and accruals have been correctly stated at the year end.