Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

15-29 (OBJECTIVES 15-3, 15-5, 15-7) Lenter Supply Company is a medium wholesale hardware supplies in the central Ohio area. It has been a clier years

image text in transcribed
15-29 (OBJECTIVES 15-3, 15-5, 15-7) Lenter Supply Company is a medium wholesale hardware supplies in the central Ohio area. It has been a clier years and has instituted excellent internal controls for sales at your recor In providing control over shipments, the client has prenumbered slips" that are used for every sale. It is company policy never to remove warehouse without an authorized warehouse removal slip. After shipm the warehouse removal slip are sent to billing for the computerized pre invoice. One copy is stapled to the duplicate copy of a prenumbered sales in other copy is filed numerically. In some cases, more than one warehouse used for billing one sales invoice. The smallest warehouse removal slip numbe is 11741 and the largest is 34687. The smallest sales invoice number is 45302 est is 65747 In the audit of sales, one of the major concerns is the effectiveness of the con suring that all shipments are billed. You have decided to use audit sampling in testing in controls. dium-sized distribute a client of yours for seve ir recommendation ered "warehouse remon remove goods from shipment, two copied rived preparation of a se sales invoice, and the arehouse removal slips number for the year is 45302 and the larg Required a. State an effective audit procedure for testing whether shipments have been billed. is the sampling unit for the audit procedure? b. Assume that you expect no exceptions in the sample but are willing to accept a TER of: percent. At a 5 percent ARO, what is the appropriate sample size for the audit test? You may complete this requirement using attributes sampling. c. Design a random selection plan for selecting the sample from the population, using ther systematic sampling or computer generation of random numbers. Use the sample size determined in part b. If you use systematic sampling, use a random starting poin, of 11932. d. Your supervisor suggests the possibility of performing other sales tests with the same sample as a means of efficiently using your audit time. List two other audit procedury that can conveniently be performed using the same sample, and state the purpos each of the procedures. e. Is it desirable to test the occurrence of sales with the random sample you have in part c.? Why or why not? ample you have designed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Framework For Internal Auditings Entity Wide Opinion On Internal Control

Authors: Wanda A. Wallace, Thomas White

1st Edition

0894135317, 978-0894135316

More Books

Students also viewed these Accounting questions

Question

4. Explain the strengths and weaknesses of each approach.

Answered: 1 week ago

Question

3. Identify the methods used within each of the three approaches.

Answered: 1 week ago