You are appointed as an auditor of multinational company situated in Oman. the company engaged in manufacturing household furniture’s. Their major raw materials are imported from China, India and Malaysia. Most of the purchase invoices are settled through foreign currencies. The company pays the wages and salary in Omani rials. In the year 2018-20 the total purchase was USD 28 million incudes the labor charges. The company is having the following classification on inventories 1. Finished goods 2. Semi-finished goods 3. Raw material The company is having the following classification on Labors 1. In house labors, those are direct employees of the company. These are further classified as Skilled and semi-skilled. 2. Contract labors, those are subcontracted labors of the company. These are classified as skilled and semi-skilled. In the course of audit, you have been observed that the all closing inventories had been valued by the management with the help of an expert. For the labors wages are paid to in house labors on monthly basis, and for contract labor wages are paid to their contractors on annual basis. 

Required: 

1. Briefly explain methods should be used by the auditor to gather the audit evidence for the purchases and Labor (wages). 

2. If the auditor having the doubt on the reliability of the audit evidence on Purchases. What he should do? Mention any five. 

3. Is audit sampling appropriate in the above mentioned items? Give reason for your answer