Viola and co

You are audit senior of Viola and co and are currently conducting audit of Poppy co for the year ended 30 June 20×6

Materiality has been set at $50000 and you are carrying out detailed substantive testing on year end payable balance
The audit manager has emphasised the understatement of trade payables balance is a significant audit risk

Below is extract from list of supplier statement as at 30 june 20X6 held by company and corresponding payables ledger
balances at the same date along with some commentary on the noted differences

Supplier Statement balance payable ledger balance
Carnation co
Lily co

Carnation co
The difference in the balance is due to an invoice which is under dispute dur to faulty goods which were returned
on 29 june 20X6

Lily co
The difference in the balance is due to supplier statement showing an invoice dated 28 june 20×6 for$70000
which was not recorded in financial statement until after year end. The payable clerk has advised the audit team
that the invoice was not recieved until 2 july 20×6

Audit manager has asked you to review full list of trade payables and select balances on which supplier statement
reconcilations will be performed

Which of the following items should you select for testing?
a)suppliers with material balances at year end
b)suppliers which havea high volume of business with Popy co
c)major suppliers with nil balances at year end
d)major suppliers where staement agrees to the ledger

Sir correct ans is a, b and c but please can you explain