What type of sampling plan should the auditors use for test?, Auditing

Assignment Help:

In performing a test of controls for sales order approvals, the CPAs stipulate a tolerable deviation rate of 8 percent with a risk of assessing control risk too low of 5 percent. They anticipate a deviation rate of 2 percent.
a. What type of sampling plan should the auditors use for this test?

b. Using the appropriate table or formula from this chapter, compute the required sample size for the test.

c. Assume that the sample indicates four deviations. May the CPAs conclude with a 5 percent risk of assessing control risk too low that the population deviation rate does not exceed the tolerable rate of 8 percent?

d. Use ACL to compute the required sample size for the test. Assume that the population size is composed of 100,000 items.

e. Assume that the sample indicates four deviations using the sample size determined in d.
Use ACL to calculate the results. May the CPAs conclude with a 5 percent risk of assessing control risk too low that the population deviation rate does not exceed the tolerable rate of 8 percent?


Related Discussions:- What type of sampling plan should the auditors use for test?

Work in progress, Work In Progress What such applies to goods for resa...

Work In Progress What such applies to goods for resale applies uniformly to work in progress even when the items present greater problems of valuation and ascertainment to the

Standardization of working papers - auditing, Standardization of Working Pa...

Standardization of Working Papers - Auditing The ICPAK guideline states that the needs of standardized working papers may improve the effectiveness along with that they are re

Materiality, how to calculate materiality given the acoountin period inform...

how to calculate materiality given the acoountin period information

Group auditing and holding campnies, what a group auditing and holding camp...

what a group auditing and holding campanies in details with exmple propurly

Historic costs methods - long term contracts, Historic Costs Methods - Long...

Historic Costs Methods - Long Term Contracts You will notice such this exercise is completely dependent on the company estimating its further costs.  This is wherever the audi

Adudit, For each threat explain how it might be avoided.

For each threat explain how it might be avoided.

Accounting concept and records-consistency, What fundamental accounting con...

What fundamental accounting concepts must you keep in mind in preparing to carry out your audit? Accounting Concept and Records Fundamental Accounting concepts are cove

Systems based audit approach, Systems Based audit approach The basis of...

Systems Based audit approach The basis of IAS 400, Risk Assessment and Internal Control. The term systems audit refers to the typical audit approach to medium and large comp

Assertions about classes, Assertions about classes Assertions about ...

Assertions about classes Assertions about classes of transactions and events for the period under audit : a) Occurrence -events and transactions which have been recorde

Internal control, Ask question #MA. Evaluate the strengths and weaknesses o...

Ask question #MA. Evaluate the strengths and weaknesses of preview Company''s control environment B. What factors in Preview company''s control environment have led to and facilit

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd