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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
Prepare any necessary adjusting entries relative to depreciation (use straight-line) and amortization (use effective-interest method) on December 31, 2011.
In an exchange qualifying for Sec. 351 tax-free treatment, Greta receives 100 shares of White Corporation stock plus a right to receive another 25 shares.
Atlantic Video, a small video rental store in Philadelphia, is open 24 hours a day, and-due to its proximity to a major business school-experiences customers arriving around the clock. A recent analysis done by the store manager indicates that the..
General Fund and Governmental Activities
Mr. Rosen is the manager of a division of Jokkmok Industries. He is one of several managers being considered for the position of CEO, as the current CEO is retiring in a year.
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q. in october of 2011 cathy bennett and mike sold their residence for 550000. they purchased it in 2000 for 300000.
Arnold Corp has a selling price of $15, variable costs of $10 per unit, and fixed costs of $25,000. Contribution margin is $60,000. How many units did Arnold sell?
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a corporation produces output with a market price of 200 per unit. the marginal product of capital is 12k where k is
Identify a real-life outsourcing decision that has been made and the specific reasons for the outsourcing. If information is available, discuss the results of the outsourcing decision (jobs lost, cost savings, etc.). Cite sources as deemed necessa..
explain how the perpetual and periodic inventory systems differ especially in determining cost of goods sold and ending
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