Reference no: EM132514036

Question - An auditor used a non-statistical sampling plan to audit the inventory of an auto supply company. The auditor tested the recorded cost of a sample of inventory items by reference to vendors' invoices. In performing the test, the auditor verified all the items on two pages selected at random from the client's 257 page inventory listing. The sampling plan resulted in a test of $50,000 of the total book value of $5,000,000, and the auditor found a total of $5,000 in overstatements in the sample. Because the senior indicated that the amount of a material misstatement in the inventory account was $100,000, the auditor concluded that the recorded inventory value was materially correct. Evaluate the auditor's sampling plan and the manner in which the results were evaluated.