You are the auditor for Gem Hardware Limited, which has a large number of suppliers of its various hardware items. Your audit assistant Karina Khan has selected a number of suppliers from the list of accounts payable at year end and traced balances to supplier invoices and goods received notes to ensure that goods were received prior to year-end. Twenty of the accounts payable were tested and three of the balances were misstated, although none of them by a material amount. The audit working papers have recorded Karina's opinion that as no material errors were located, the accounts payable balance should be accepted.

Required:

Explain whether Karina's conclusion is inappropriate and outline additional audit procedures, if any, that you would perform.