Lisaza & Partner has been appointed as the company's auditor for Odit Berhad. She is considering

the audit work to be performed in the accounts payable area for the current-year engagement.

The prior-year documentation shows that confirmation requests were mailed to 10% of its

suppliers. The selected suppliers were based on Lisaza's sample that was designed to select

accounts with large dollar balances. Lisaza and Odit's staff spent a substantial number of hours

resolving relatively minor differences between the confirmation replies and Odit Berhad's

accounting records.

Alternative audit procedures were used for those suppliers who did not respond to the confirmation

requests.

Required:

a) Discuss the accounts payable management assertions that Lisaza must consider and focus in

determining the audit procedures to be performed.

(9 marks)

b) What are the possible manipulations for the following events and the reasons of

manipulation?

(i) Purchase inventory

(ii) Return outwards goods

(iii) Selling inventory

(iv) Periodic count of inventory quantities

Required:

Explain two (2) possible manipulations with reason for each of the events.

(16 marks)

Present your answer in the following structure:

Manipulations & Reasons

(i) 1.

2.

(ii)1.

2.

(iii)

(iv)

(Total 25 marks)