Reference no: EM133415858

Instructions: Review the information give in the Appendix before attempting this homework. The homework is also included in the textbook - Chapter 11 Appendix. Respond to all required items.

AVF Company processes an average of 400 vouchers payable every month. Each voucher package contains a copy of the check disbursed and supporting documents such as vendor invoices, receiving reports, and purchase orders. The internal auditor plans to examine a sample of vouchers listed in the voucher register using attribute sampling to evaluate the effectiveness of several controls. The attributes of interest include:
• Agreement of voucher amounts with invoice amounts.
• Voucher canceled after payment.
Based on experience, the auditor expects a deviation rate of 2 percent for the first attribute and 1 percent for the second. He decides on a tolerable deviation rate of 7 percent for the first attribute and 6 percent for the second. He sets the risk of assessing control risk too low at 5 percent.
Assume that the auditor's tests uncovered two occurrences of voucher amounts not agreeing with invoice amounts and two occurrences of vouchers not being canceled after payment.
REQUIRED:

1. Complete the sampling attributes table on the next page. (Note: round sample size per table up to next number ending in zero for sample size used.)
2. Evaluate the sample results for the two attributes. Your answer should include:
a) A statistical conclusion for each attribute.
b) The audit decision you would make based on the quantitative sample results for each attribute.