You are the audit manager performing the audit of Retry Ltd, a large manufacturer of retread tyres. You are currently performing a review of some of the work performed by the audit senior, Tim Spurling, on creditors. Background information and the related working paper are given below. In prior years, material unrecorded liabilities were discovered due to problems with accruals of unpaid suppliers’ invoices. Trade creditors as at 30 June 20X1 amount to £1,875,517. As in prior years, four major suppliers comprise 80 per cent of the trade creditors balance. Tim Spurling prepared the following working paper.

Required

(a) Are there any apparent quality control weaknesses in the work performed?

(b) What action/further work would you perform to ensure that accounts payable was fairly stated?

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Retry Ltd Creditors 30 June 20X1 AP-5 Prepared by: TS Date: 23/8/X1 Testing of supplier balances The four major suppliers were selected from the trade creditors ledger as at 30 June 20X1. The ledger balances were as follows: Notes Supplier Ledger Statement name balance balance Comment AX Limited 410,800 405,719 1 BBD Ltd 372,100 n/a 2 789 Partners 461,900 BJC Ltd 260,590 527,100 260,590 3 No further work needed. 1Statement dated 27/6. Difference of 5,081 immaterial given two days extra trading until year-end cut-off. Ledger balance reasonable. 2No statement issued. Instead, I agreed a sample of invoices as per the ledger balances to original creditor invoices. No discrepancies noted. 3Balance per statement 527,000. Last cheque paid 30/6 (65,200) Balance per ledger 461,900.