You are the audit senior in charge of the audit of Pearl Manufacturing Bhd for the year ended 31 December 2020. Diyana, a fresh graduate from Universiti Sains Malaysia, has been assigned to assist you in the audit. Diyana was assigned to complete the audit of purchases and accounts payable

Part 1 On reviewing the audit working papers relating to accounts payable, the following came to your attention 1. According to the general ledger, accounts payable balance as at 31 December 2020 was RM250,000 compared to RM450,000 as at 31 December 2019. 2. As the current year balance of accounts payable is immaterial (overall materiality was set at RM325,000), Diyana carried out limited work on accounts payable. She selected the four (4) largest payables from the client's purchase ledger and agreed the balances to the photocopies of suppliers' statements.

Required: a. Explain whether Diyana has undertaken an appropriate audit procedure to test the reasonableness of Pearl Manufacturing Bhd's accounts payable balance.

b. Explain the procedures involved in searching for unrecorded liabilities in Pearl Manufacturing Bhd's purchasing process. (Hint: Explain the specific audit procedures you would perform to ensure that there is no unrecorded liabilities in the accounts payable general ledger for Pearl Manufacturing Bhd).