ACL Auditing Command Language

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Sampling Command - Record Sampling

Q-5-1. Calculate Record Sample Size - Inventory Table

Inventory_Review

Inventory

Required

a. Use the Sample g Calculate Sample Size command. Indicate the required

sample size on the Inventory table if the confidence level is 95%, the upper

error limit is 7%, and no errors are expected.

___________________________________________________________________

b. What is the sample size if the confidence level in part a is decreased to 90%?

___________________________________________________________________

c. Most inventory populations would be much larger than the 152 records in

the Inventory table in Sample Project. Change the population size to 10,000

records (use a confidence level of 95%, upper error limit of 7%, and no errors

expected). Indicate the sample size relative to the sample size in part a (smaller,

larger, unchanged, or cannot determine).

___________________________________________________________________

Q-5-2. Select Record Sample - Inventory table

Required

a. Use the Sample command to select a random sample of 25 inventory items

(records) in the Inventory table. Use a seed number of 2674. Save the results in

an output table (a new ACL table) called INV_Random_Sample1.

What is the Inventory_Value_at_Cost of the largest sample item?

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b. What would happen to the number of items selected if the seed number in part

a had been different (smaller, larger, unchanged, cannot determine)?

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c. What would happen to the actual items selected if the seed number in part a

had been different (same, different, or cannot determine)?

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d. Use the Sample command to select a random sample of 20 records from the

Inventory table from items that have a total cost value (field name = Inventory_

Value_at_Cost) of more than $0, but less than or equal to $10,000. Use a seed

number of 9,367. Save the results to an output table called INV_Random_

Sample2. Hints: (1) Use a filter, run the Count command, then run the Sample

command on the filtered data. (2) It is not necessary to extract the filtered data

to a new table.

What is the population size for the sample?

___________________________________________________________________

e. What is the total market value (field name = Market_Value) of all 20 sample

items in part d?

___________________________________________________________________

Q-5-3. Evaluate Record Sample - Any table

Required

a. Assume that you found no errors in a sample of 20 records. What is the upper

error limit at a confidence level of 90%?

___________________________________________________________________

b. Assume that you increased the sample size from part a to 30 records sampled.

What is the upper error limit at a confidence level of 90% if no errors are

found?

___________________________________________________________________

c. Assume that you used a sample size of 30 records, but found one error. What is

the upper error limit at a confidence level of 90%?

___________________________________________________________________

d. Assume you find no errors in a sample of 30 records. What is the upper error

limit if the confidence level is increased to 95%?

___________________________________________________________________

Sampling Command - MUS Sampling

Q-5-4. Calculate MUS Sample Size - AR Table

Accounts_Receivable_Audit

AR

Use the Sample command to select a sample of monetary units of account balances in the

AR file. Note: you must first summarize the transactions to generate customer balances.

You have decided that all accounts over $25,000 are key items and will be tested separately,

and you should also exclude any negative balances from accounts receivable.

Required

a. What was the adjusted population $ value you used to determine sample size

and select the sample?

___________________________________________________________________

b. Start with the adjusted population determined in part a. Calculate the sample

size assuming a 90% confidence level, $25,000 materiality, and expected error

of $1,000.

Sample size: ___________________________________________________

c. What is the sample interval calculated from part b?

___________________________________________________________________

d. Select the sample using the information in parts a-c. Use the adjusted population

from part a. Use the confidence level of 90%, $25,000 materiality, and $1,000

expected error from part b. Use the sampling interval computed in part c. Use

a random start of 2189 for the Start box. Save the results in an output table (a

new ACL table) called AR_MUS_Sample. What was the largest sample item

included in your sample?

___________________________________________________________________

e. The original parameters for the sample in this series of questions were 90%

confidence level, $25,000 materiality, and $1,000 expected misstatements.

Indicate the effect on the sample size if you change the confidence level from

90% to 95%, but all other parameters stay the same (smaller, larger, unchanged,

cannot determine).

___________________________________________________________________

f. The original parameters for the sample in this series of questions were 90%

confidence level, $25,000 materiality, and $1,000 expected misstatements.

Indicate the effect on the sample size if you change materiality from $25,000

to $50,000, but all other parameters stay the same (smaller, larger, unchanged,

cannot determine).

___________________________________________________________________

g. The original parameters for the sample in this series of questions were 90%

confidence level, $25,000 materiality, and $1,000 expected misstatements.

Indicate the effect on the sample size if you change the expected error from

$1,000 to $5,000, but all other parameters stay the same (smaller, larger,

unchanged, cannot determine).

___________________________________________________________________

Q-5-5 Evaluate MUS Sample - Any table

Required

a. Use ACL to evaluate a monetary unit sample with a 90% confidence level,

interval length of $10,138.52, and no errors. Indicate the upper error limit.

___________________________________________________________________

b. Now assume for the same sample from part a that an item with a recorded

balance $7816.69 was overstated by $500. What is the most likely error for the

sample?

___________________________________________________________________

c. What is the upper error limit from part b?

___________________________________________________________________

Assignments Part II - Problems

Record Sampling - Inventory Table

(Sample commands can be performed in any table)

P-5-1. Assume you selected a sample of 20 records and found no errors in the records

sampled. The confidence level is 90%. What should the auditor do if the tolerable

exception rate (allowable upper error limit) specified is 9%?

P-5-2. Assume you selected a sample of 25 records and found one error in the records

sampled. Based on a confidence level of 90%, the upper error limit is 15.56%.

The tolerable exception rate is 8%. The engagement in-charge has recommended

doubling the sample size. Evaluate whether this is appropriate.

MUS Sampling - AR Table

(Sample Commands can be performed in any table)

P-5-3. You are evaluating a monetary unit sample with a 90% confidence level and

sampling interval of $10,138.52. You tested a customer balance of $14,691.12 and

found an overstatement error of $1,000. What is the most likely error and upper

error limit amount associated with this error? Explain this result.

P-5-4. You select a sample of accounts receivable balances for testing from a population of

$300,000 based on a desired confidence of 90%, tolerable misstatement of $50,000,

and no expected errors. In your testing, an item with a balance of $1,500.39 was

overstated by $100. Based on an interval of $21,645.02, what is the upper error

limit? Should the auditor accept the sample results? Explain why these results were

obtained and how the auditor is likely to address the results.