From prior audits of Bristol, Inc. and recent discussions with management, an auditor believes that sales invoices agree in detail with related shipping documents, with very few exceptions. Therefore, zero or very few deviations are expected, and sequential sampling is selected as the statistical sampling plan. The auditor defines each relevant line item on the sales invoice as a separate sampling unit. Following are the auditor's desired reliability and tolerable rates of deviation for each attribute:

No deviations were observed for Attributes 1 and 2, and one deviation each was observed for Attributes 3, 4, and 5, though not on the same sales invoices.

Required: 

1. Determine initial sample size for each attribute.

2. How can the sales invoices be selected if sample size varies from attribute to attribute?

3. For each attribute, indicate whether to stop or go, and why.

Transcribed Image Text:

Desired Tolerable Rate Attribute Reliability of Deviation 1. Customer name .90 .04 2. Description .90 .05 3. Quantity .95 .06 4. Unit price .95 .05 5. Extensions .95 .05