$13-7$

Required: Using Analytical Procedures for Accounts Payable and PurChases, as a guide: $($Number of days purchases in accounts payables, payable turnover, compare accounts payable to prior year payables balance, compare purchases to $($market share $*$ Industry Share$)*(1-$ Ave. markup $\%),$ compare both purchases and payables with budgets or forecasts, compare both purchases bad payables with prior years, compare both payables divided by total current liabilities for the current and prior years, compare purchases divided by payabales for the current and prior years, and compare individual vendor payables for the current and prior years:

$1.$ Perform analytical procedures you think appropriate for Singulair's December $31,2007,$ audit. For example, the balance sheets and statements of operations include information that can be used to calculate the numbers of days' purchases in payables and payables turnover and to make several informative comparisons.

$2.$ Explain the results for each ratio or comparison. For example, an increase in payables turnover could signal overstated purchases or understated payables, among other things.

$3.$Discuss substantive tests appropriate for the results explained in requirement $2.$ For example, an analytical procedure that signals overstated payables could prompt an auditor to increase the scope of cutoff testing.