Question: Required a. The risk of assessing control risk too low is 10%. Determine the sample size for each of the following controls: b. Explain why

Required
a. The risk of assessing control risk too low is 10%. Determine the sample size for each of the following controls:

b. Explain why the sample sizes for controls 2 and 3 are different from those for control 1.
c. What is the general effect on sample size of using a 10% risk of assessing control risk too low rather than 5%? Explain.
d. Would it be better to use the individual sample sizes in part (a) or to use the largest for all five controls? Explain.
e. Assume a sample size of 80 is used for all five controls. Determine the achieved upper limit of failures in the population for each control and complete the table in part (a).
f. Based on the answers to part (e), on which of the controls can the auditor place the planned degree of reliance?Why?

Tolerable Rate (%) Expected Rate (%) Sample Number of Achieved Control Size Failures Upper Limit 10 0.5 10

Step by Step Solution

★★★★★

3.33 Rating (186 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a e Control Tolerable Rate Expected Rate a Sample Size Number of Deviations e Upper Limit 1 5 0 4... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

222-B-A-A-B-R (451).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

Determine the sample size for each of the following situations. a. N = 2,500 p` = 0.5 1.96spn = 0.05 b. N = 2,500 p` = 0.5 1.96spn = 0.03 c. Compare and comment on your answers to part a and part b.

Would it be better to use time-series or cross-section data in the following models? (a) The relationship between the exchange rate and the money supply, (b) The determinants of divorce, (c) The...

In what type of circumstances would it be better to avoid a Type I error as opposed to trying to avoid a Type II error?

Jackson CPA is examining the operating effectiveness of internal control related to the audit of Davidson, Inc. Jackson has set the following factors: Tolerable deviation rate: 5% Expected Deviation...

Tests of Controls and Attribute Sampling Calgari Clothing is a division of A&B Industries and manufactures high-quality silk ties that are marketed under a number of brand names. You are an...

61.Sampling risk refers to the possibility that: Group of answer choices The confidence level and/or precision established by the auditor are not appropriate. The auditor may use a less than optimal...

Guidance for using IDEA for attributes sampling is presented in our IDEA Audit Sampling_Guide. The texts attributes problems that explicitly incorporate the use of IDEA are 9-30, 41, and 45. Within...

VII. Tests of Controls and Attribute Sampling [Chapter 11] Calgari Clothing is a division of A8113 Industries and manufactures highquality silk ties that are marketed under a number of brand names....

Calgari Clothing is a division of A&B Industries and manufactures high-quality silk ties that are marketed under a number of brand names. As an internal auditor for A&B, you have been assigned to...

Calgari Clothing is a division of A&B Industries and manufactures high-quality silk ties that are marketed under a number of brand names. You are an Intermediate External Auditor with the Public...

The U.S. Small Business Administration offers assistance to individuals wishing to become registered vehicle importers. What types of assistance are available to suppliers seeking to sell their...

Let X1, X2,..., Xn be a sample from the inverse Gaussian pdf, a. Show that the MLEs of Î¼ and Î» are b. Tweedie (1957) showed that n and n are independent, n having an...

Evaluate the integral: 0 1 ( 6 x + 6 x 2 + 2 x + 9 ) d x

Horseshoe bars (genus Rhinolophus) emit sounds from their nostrils and then listen to the frequency of the sound reflected from their prey to determine the prey's speed. (The horseshoe" that gives...

In Figure a uniform rod of mass m is hinged to a building at its lower end, while its upper end is held in place by a rope attached to the wall. If angle 1 = 60, what value must angle 2 have so that...

Suppose 12.0g of oxygen (O2) gas is heated at constant atmospheric pressure from 25.0oC to 125oC. (a) How many moles of oxygen are present? (See Table 19-1, for the molar mass.) (b) How much energy...

We arrived at Formula 6.3.2, V = ∫b 2πx f(x) dx, by using cylindrical shells, but now we can use integration by parts to prove it using the slicing method of Section 6.2, at least for the case...

(a) Sketch the curve y3 = x2. (b) Use Formulas 3 and 4 to set up two integrals for the arc length from (0, 0) to (1, 1). Observe that one of these is an improper integral and evaluate both of them....

short-term assets;

What alternative methods can be used to test the effectiveness of controls in the revenue cycle?

How do auditors use their knowledge about the risk of material misstatement in designing substantive tests?

code class = "asciimath" > what is the best way to be a doctor

QUESTION 2 Project Boyaz is expected to generate $37,000 each year for the next 5 years. It will cost $105,000 to implement the project today. If the project's required rate of return is 13.5%, what...

Twenty years ago John invested $7,500 in a mutual fund. The value of his investment declined by 19% during the first year and then declined another 30% during the second year. Eighteen more years...