1. Kashir Advertising CreditsNefret had arrangements with some vendors to share the cost of advertising the vendors product. The arrangements were usually agreed to in advance by the vendor and supported by evidence of the placing of the ad. Nefret created a 250-page list of approximately 1,000 vendors, supporting advertising credits of $500,000. Nefrets auditors selected a sample of 8 of the 2,500 items for direct confirmation. One item was confirmed by telephone, one traced to cash receipts, one to a vendors credit memo for part of the amount and cash receipts for the rest, and one to a vendors credit memo. Two of the amounts confirmed differed from the amount on the list, but the auditors did not seek an explanation for the differences because the amounts were not material. The rest of the credits were tested by selecting 30 items (several from each page of the list). Fourteen of the items were supported by examining the ads placed, and sixteen were supported by Nefret debit memos charging the vendors for the promotional allowances.

Identify deficiencies in the sufficiency and appropriateness of the evidence gathered in the audit of accounts payable of Nefret Stores.