Reference no: EM132470869

This is the information provided: After completing the tests of controls for inventories and purchases for DTB Inc. for the year ended You have been assigned to work on the accounts receivable section of the 2019 audit of XYZ. You have completed your study of the internal controls (attribute sampling) over sales and receivables and have decided that the key control over the completeness of sales is that shipping orders must be matched to sales invoices.

1. determine the correct sample size.

2. test to see if the control is operating as described.

Information given

1. Acceptable risk of incorrect acceptance (beta risk) = 5%. Expected population deviation rate = 1%
2. Tolerable deviation rate = 3%
3. Based on the work completed, you discovered that three shipping orders were not attached to sales invoices.

Required:

Question 1: Prepared in good form a working paper and conclude whether the auditor can rely on the control of completeness of sales and receivables. Your working paper should include the sampling steps identified in the textbook for tests of controls. Each step should clearly specify how it relates to the facts in the question above.