You have completed your review and preliminary evaluation of internal accounting controls over the purchasing, accounts payable, and cash disbursements system of Riley Corporation, which has been your client for several years. You are now beginning to design an attribute sampling plan to test the controls that you expect to rely on in performing substantive tests on account balances resulting from these classes of transactions. Last year, the sampling plan contained the following attributes for this system:

1. Agreement of canceled check with entry in cash disbursement journal.

2. Evidence of accounts payable department agreements of vendor's invoice with purchase order and receiving document before approving invoice for payment.

3. Evidence of internal verification of the mathematical accuracy of the invoice.

4. Propriety of the account distributions on the invoice.

5. Agreement of cancelled check with invoice as to payee and amount.

6. Evidence of purchasing department approval of purchase order.

7. Correctness of journalizing of invoices.

8. Correctness of posting of invoices to accounts payable ledger.

You believe these attributes are appropriate for this year's test. In the preceding two years approximately 10,000 checks were written and the following occurrence rates were found for each attribute.

1. From ycur review of the client's system, you determine that the bank account is reconciled monthly by an internal auditor and that there appears to be satisfactory segregation of functions.
2. From your analysis of last year's sample results, you learn that several invoices were not mutilated upon payment. In addition, you discover that the coding of several invoices resulted in the improper capitalizing of repairs expense.
Required:
Based upon the limited information given and your subjective evaluation of the importance of each attribute,

(a) establish the statistical criteria for each attribute and

(b) compute the sample size. Justify the statistical parameters ihat you have set.

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Attribute Rate Attribute Rate 1 0 2 3 2 4 2 5678 22 5 1 6 4 2 3