Purchase authorizations for purchase orders: All purchase orders are prepared by the purchasing department from purchase requisitions submitted by the requesting departments. Purchase requisitions are to be signed by a manager who has been given responsibility for a budget and authorized to initiate purchases. During the year under audit 8,238 purchases were completed. You obtained a list of all managers with authority to approve purchase requisitions and have decided to check a sample of purchase requisitions for proper authorization signatures. All purchase requisitions which do not include a proper signature will be considered deviations (errors). The following questions apply to this control.

Purchase authorizations for purchase orders: To test purchase requisitions for proper authorizations for purchase orders you wish to be 90% confident of your results. Given the nature of this test and the presence of compensating controls you have chosen a tolerable deviation rate of 5%. Based on past experience you expect a population deviation rate of 1.25%. Based on the tables in Chapter 8 of the textbook, the sample size should be which of the following?

Purchase authorizations for purchase orders: In spite of your excellent work calculating sample size, your audit manager instructed you to take a sample of 120 purchase requisitions to test. Your test identified three cases where the proper authorization signature was missing and the order was still placed by the purchasing department. Using the tables in Chapter 8 of the textbook, what is the computed upper deviation rate for this test at a 90% confidence level?

Purchase authorizations for purchase orders: Without regard to the above information, assume that your tolerable deviation rate is 4%, you wish to be 90% confident in your results, and you found one error in a sample of 100 purchase requisitions. The sample size was properly calculated. Which of the following would be the proper conclusion to draw from this information?

Purchase authorizations for purchase orders: Independent of the information above, assume that your tolerable deviation rate is 4%, you wish to be 90% confident in your results, and you found no errors in a sample of 100 purchase requisitions. Which of the following would be the proper conclusion to draw from this information?