In performing tests of controls and substantive tests of transactions for Oakland Hardware Company, Ben, an audit assistant, is concerned with internal verification of pricing, extensions, and footing of sales invoices and the accuracy of calculations. In testing sales Ben uses audit sampling. For the test of control he uses the attribute, the existence of internal verification, and for the substantive test of details, he uses the attribute - the accuracy of the calculation. Because internal controls are considered good, Ben uses a 10 percent ARACR (Acceptable Risk of Assessing Control Risk), a zero EPER (Estimated Population Error Rate), and 5% TER (Tolerable Exception Rate) for both attributes. Therefore, the initial sample size is 45, which Ben rounds up to 50.

In conducting the tests, Ben finds three sample items for which there are no indication of internal verification on the sales invoice, but no sales invoice tested in the sample has a financial misstatement.