You are auditing the accounts payable and purchases at Axis Pty Ltd for the year ended 30 June 2018. One of Axis’ major accounts payable, Chain Ltd, is very slow in sending out invoices for goods it has delivered. Also, due to a quality control problem at Chain, a large number of goods that Chain has supplied to Axis have been deemed faulty and have had to be returned to Chain with a request for credit.

Required:

List the key audit assertions at risk for accounts payable and purchases, and outline the audit procedures you would perform in order to gather sufficient appropriate audit evidence for each of these assertions.