Question
Substantive Testing You have completed a pricing test of Coles inventory using Dollar Unit Sampling plan. The sample design for your test of the $5
Substantive Testing You have completed a pricing test of Coles inventory using Dollar Unit Sampling plan. The sample design for your test of the $5 000 000 inventory specified a risk of incorrect rejection of 5% and a risk of incorrect acceptance of 10% with a tolerable error of $400 000. You anticipated not more than $50 000 of error in the inventory due to an excellent internal control. Required: a)What sample size should you have examined? b)What is your sampling interval? c)Assuming no errors were found in the sample, what is your conclusion? Show all calculations d)Assuming the sample yielded a projected error of $20 000 and a total allowance for sampling risk of $48 000, what conclusion you might draw from the sample?
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