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Your firm has selected you to develop and assess the control risk over shipping and billing functions of ABC Company. The audit manager wishes to rely on control risk assessment at a low level. In other words, the firm would like to be able to assess internal control risk at a low level. You wish to estimate control risk at the desired low-level, therefore you selected a tolerable deviation rate of 20%. To estimate the population deviation rate and the computer and upper deviation rate you have applied discovery sampling techniques that would use an expected population deviation of 3%. There are 8000 shipping documents and to postpone consideration of the allowable risk of assessing risk to low until the sample results were evaluated. You use the tolerable deviation rate, the population size, and expected population deviation rate to determine the sample size of 80 should be sufficient. Later you discovered that the actual population size was 10,000 shipping documents therefore you've increased your size by 100. your objective is to determine wether ABC's shipping have been properly billed. You took the sample of 100 invoices by selecting the first 25 minutes invoices from the first month of each quarter then you compare those to the corresponding pre-numbered shipping documents. you discovered eight deviations and one shipping that should have built at $10,440 but was actually billed at $10550. You consider this amount to be immaterial and did not counted it as an error. In your valuation you have made the initial determination that a 5% risk of assessing control risk to low was desired and using the appropriate statistical sampling table you determine that for the deviations from sample size of 100 the computed upper deviation rate was 14%. when you calculated the allowance or sampling risk you determined it to be 5%, the difference between the actual sample deviation rate which was 8% and expected rate which you decided was 3%. you determine that the actual sample deviation rate plus it allows for sampling risk, 5%, was less than the computed upper the actual sample deviation rate plus it allows for sampling risk 5% was less than the computed upper deviation rate of 14%. Given this you determined that the sample supported a low level of control risk.
Prepare and describe each incorrect assumption, statement and/are inappropriate application in the above procedures
Break-Even Sales and Sales to Realize Income from Operations For the current year ending March 31, Jwork Company expects fixed costs of $480,000, a unit variable cost of $41, and a unit selling price of $61. Compute the anticipated break-even sales (..
Prepare a brief essay that evaluates the validity, both ethically and practically, of the controller's plan.
This budget's focus is solely on attending college; do not include personal items in the budget. Your budget must include tuition, books, supplies, fees, food, housing, and all costs associated with travel to and from college.
The Thomlin Company forecasts that total overhead for the current year will be $11,673,195 and that total machine hours will be 168,112 hours. Year to date, the actual overhead is $7,840,877 and the actual machine hours are 85,085 hours. If the Thoml..
On January 1: issued ten (10), $1,000 bonds at 102. The 5-year bonds, is dated January 1, 2014. The contract interest rate is 6%. Straight-line amortization method is used. Interest is payable semi-annual on January 1 and July 1. b. On July 1: Frick ..
Debt has deadlines. Deadlines can be missed. Common stock lasts indefinitely. The higher percentage of resources raised from debt, the higher percentage resources subject to deadlines, hence risk. What is the effect on return on equity of raising cap..
On April 1, 2014, West Company purchased $420,000 of 5.00% bonds for $436,550 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2019.
Should the company continue to manufacture the part, or should it buy the part from the outside supplier- Target cost equals selling price required return of computer company required return to Timberland - Prepare a three-column comparative income s..
In accounting and auditing, the following sampling method is sometimes used to estimate a population total. In estimating the value of an inventory, suppose that a book value exists for each item and is readily accessible. For each item in the sample..
Calvin and Hobbes are the new owners of Micro Computer Services. At the end of August 2010, their first month of ownership, Calvin and Hobbes are trying to prepare monthly financial statements. They have the following information for the month.
Show the effects of recognizing the NSF check on the financial statements by recording the appropriate amounts in a horizontal statements model and determine the true cash balinCe by.preparing a bank reconciliation econciliation as of May 31, 2013..
A corporation was formed on January 1 and was authorized to issue 400,000 shares of common stock at $2 par value.
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