Mavis Stores had two billing clerks during the year. Snow worked three months and White worked nine
Question:
Mavis Stores had two billing clerks during the year. Snow worked three months and White worked nine months. As the auditor for Mavis Stores, Jones, CPA, uses attributes sampling to test clerical accuracy for the entire year, but due to the lack of internal verification, the system depends heavily upon the competence of the billing clerks. The quantity of bills per month is constant.
Required:
a. Jones decided to treat the billing by Snow and White as two separate populations. Discuss the advisability of this approach, considering the circumstances.
b. Jones decided to use the same confidence level, expected error rate, and desired upper precision limit for each population. Assuming he decided to select a sample of 200 to test Snow's work, approximately how large a sample is necessary to test White's?
Step by Step Answer:
Modern Auditing
ISBN: 9780471542834
5th Edition
Authors: Walter Gerry Kell, William C. Boynton, Richard E. Ziegler