How would this affect your sample size

Assignment Help Managerial Accounting

Reference no: EM133206097 , Length: Word Count: 750 Words

Management Control and Auditing Assignment - Audit Ethics Plan and Risk Paper

Part 1 (500-750 words) - In preparation for the Bovar Company's year-end audit, your manager has asked you to create a document about auditing principles and the code of conduct to share with the rest of the internal auditors. You know that the Institute of Internal Auditors (IIA) provides professional guidance and a code of ethics for internal auditors, but you need to revisit that information to create the memo and include the following:

-Auditing principles

-Code of conduct

Part 2 (200-300 words) - To assess Bovar's liability for the upcoming external audit, discuss the following topics with your team:

What is the relationship of risk and materiality?

How are risk and materiality related?

How are risk and materiality integrated into the audit process?

What is an example of a statement that includes both risk tolerance and materiality?

Part 3 - Based on the group discussion, apply a risk assessment technique to decision making by using the following example:

Assume that you are going to use nonstatistical sampling to evaluate the results of accounts receivable confirmation for the Bovar audit. Results from previous audits have been excellent. Because of the high quality of the controls at Bovar, you have decided to use an acceptable risk of incorrect acceptance of 10%. There are 3,000 accounts receivable with a gross value of $9,601,883. You have decided that an overstatement or understatement of more than $150,000 would be considered material.

Complete the following:

-Calculate the required sample size using the following formula:

Sample size = (book value of population / tolerable misstatement) x assurance factor

Assurance factor:

-5% ARIA = 3

-10% ARIA = 2

-20% ARIA = 1

Assume that instead of good results from previous audits, Bovar had poor results and the controls in place were questionable.

Discuss the following (300 words)

How would this affect your sample size?

How would you use this information in your sample size determination?

How would you select the accounts for testing using systematic selection?

Reference no: EM133206097

Questions Cloud

Who do these food safety laws apply to : What are the predetermined control methods as per Salford Colleges Food Safety Plan for the critical control points and Identify five monitoring documents

Determining the outstanding common shares : At December 31, 20x7, Tobi Inc. had 249,316 common shares outstanding. During the year 20x7, the company completed the following transactions:

Should you go into work and handle food : According to Salford College's Food Safety Plan when should you wash your hands and You have a food borne illness, should you go into work and handle food

What challenges would you expect to encounter : What challenges would you expect to encounter and what would be your plan to work through these issues.

How would this affect your sample size : ACCT644 Management Control and Auditing Assignment - Audit Ethics Plan and Risk Paper, Colorado Technical University - How would this affect your sample size

How to calculate payout ratio and retention ratio : How to Calculate Payout Ratio and Retention Ratio According to Walmart and Target's financial statements for the period 2020 to 2022, and then compare in a few

Discuss the development of your ei competencies : Identify and discuss the 3 most personally valuable things learned in the HRMT Program - develop further with corresponding action plans

Where do we find most fossils : where do we find most fossils (what type of rock), and why? Would you expect to find more fossils in the marine, or continental sedimentary environment

Explain how climate change has created or worsened challenge : Explain how climate change has created or worsened this environmental challenge. Support your explanation with references.

User Account

All Pages