Determining the sample size for accounts receivable

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Question - Kaela Stevens is auditing Turbo Ltd, an existing client, for the year ended 30 June 2018. Turbo's accounts receivable was recorded at $4 000 000 and comprised more than 1000 customer accounts. However, Turbo's 10 largest customer balances comprised more than 25 per cent of the recorded accounts receivable. As a result, Kaela is considering the use of dollar-unit sampling.

Outline four factors Kaela should consider in determining the sample size for accounts receivable, and indicate how she would determine the value to place on these factors.

Reference no: EM132825331

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