Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Could I get help answering this question please? Q3: Attribute Sampling You are auditing price controls over accounts receivable for Becker Construction Co. The control
Could I get help answering this question please?
Q3: Attribute Sampling You are auditing price controls over accounts receivable for Becker Construction Co. The control being tested requires that the client use only the approved price list when valuing sales invoices. For each test item in the sample, the auditor will compare the price on the invoice with the approved price according to the authorized price list. Risk of assessing control risk too low is set at 10%. The client's book value is $9,325,000 and there are over 8,000 active subsidiary balances. Materiality is set at $215,000. Prior audits have shown that this control test should use an expected population deviation rate of 2% and a tolerable error rate of 6%. Hints: the example I reviewed in the recorded lecture has "Risk of assessing control risk too low is set at 5% with different percentages; you will look up tables with confidence level at 90%. Q1: What population are we testing? Q2: What is the attribute for this test? Q3: What is the sample size? Q4: If there are 3 errors in the sample, what is the achieved upper error limit? Q5: What do we conclude about the operation of this internal controlStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started