AVF Company processes an average of 400 vouchers payable every

month. Each voucher package contains a copy of the check disbursed

and supporting documents such as vendor invoices, receiving

reports, and purchase orders. The internal auditor plans to examine

a sample of vouchers listed in the voucher register using attribute

sampling to evaluate the effectiveness of several controls. The

attributes of interest include:

Agreement of voucher amounts with invoice amounts.

Voucher canceled after payment.

Based on experience, the auditor expects a deviation rate of 2

percent for the first attribute and 1 percent for the second. He

decides on a tolerable deviation rate of 7 percent for the first

attribute and 6 percent for the second. He sets the risk of assessing

control risk too low at 5 percent.

Assume that the auditor's tests uncovered two occurrences of

voucher amounts not agreeing with invoice amounts and two

occurrences of vouchers not being canceled after payment.

a. Complete the following schedule. (Note: round sample size per

table up to next number ending in zero for sample size used.)

Attribute 1 Attribute 2

Risk of assessing control risk too low

Tolerable deviation rate

Expected population deviation rate

Sample size per table

Sample size used

Number of deviations identified

Sample deviation rate

Achieved upper deviation limit

b. Evaluate the sample results for the two attributes. Your answer

should include:

A statistical conclusion for each attribute.

The audit decision you would make based on the quantitative

sample results for each attribute.