ABC Stores is a large discount catalog department store chain. The company has recently expanded from 8 to 60 stores by borrowing from several large financial institutions and from a public offering of common stock. A recent investigation has disclosed that ABC materially overstated net income. This was accomplished by understating account payable a recording fictitious supplier credits that further reduced accounts payable. An SEC investigation was critical of the evidence gathered by ABC's audit firm, John & Peter, in testing account payable and the supplier credits. The following is a description of some of the fictitious supplier credits and unrecorded amounts in account payable, as well as the audit procedure.

1. John & Peter also performed a purchased cutoff test by vouching account payable invoices received for9 weeks after year-end. The purpose of this test was to identify invoices received after year-end that should have been recorded in account payable. Thirty percent of the sample (RM160,000) was found to relate to the prior year, indicating a potential unrecorded liability of approximately RM500,000. The audit firm and ABC eventually agreed on an adjustment to increase account payable by RM260,000.

Identify deficiencies in the sufficiency and appropriateness of the evidence gathered in the audit of account payable of ABC Stores. ( Provide four or more important point in conclusion part.)