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What should iceberge conclude about each control

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Question - Doug Iceberge, senior-in-charge of the audit of Fisher Industries, has decided to test the following two controls for Fisher's revenue process.

1) All sales invoices are supported y proper documentation, that is, a sales order and a shipping document.

2) All sales invoices are mathematically correct.

Iceburege has decided to use a nonstatistical sampling approach based on the following judgments for each control and has judgmentally decided to us a sample size of 50 sales invoice packets.

Control Procedure

Parameters 1 2

Desired confidence level 95% 90%

Risk of assessing control risk too low 5% 10%

Tolerable deviation rate 6% 8%

Expected population deviation rate 3% 3%

After completing the examination of the 50 sample items, Iceberge noted one deviation for control 1 and two deviations for control 2.

What should Iceberge conclude about each control? Justify your answer.

Reference no: EM132003967

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