The assessment exercises for Module E Part 1 focus on your ability to plan and evaluate a statistical sample for Internal Control Attributes Testing, also known as 'Attributes Testing'. For this week, you do not need to use IDEA to solve these scenarios, but will instead use the AICPA Sampling Tables from the textbook, at Appendix EA and EB.

Be careful to ensure that you are using the correct AICPA table. Appendix EA(1) uses a Risk of Overreliance of 5%, and Appendix EA(2) uses a Risk of Overreliance of 10%.

Bright IDEAs Inc. Sample Size Determination

You are planning the internal controls testing for Bright IDEAs Inc. Specifically, you are interested in evaluating the mathematical accuracy of sales invoices to support the Valuation Assertion.

The internal control that you have selected to test is that an employee recaclulates and verifies the amounts billed to customers as printed on each invoice, by multiplying the quantity sold by the approved sales price per the master price listing. After the employee completes this calculation and look-up to verify the correct price, they add their initials and date to the invoice copy maintained by the Bright IDEA's Accounts Receivable Department.

You have been informed by the Audit Partner that you will be using a 10% Risk of Overreliance. Past experience with this auditee indicates that a 1.5% population deviation rate can be expected, and you have assessed Control Risk as MODERATE for this cycle and assertion, so your team has decided to use an 8% Tolerable Deviation Rate. See the table at Exhibit E.1 for suggested rates to use.

What is the recommended AICPA sample size for this control test?

Textbook = McGraw Hill Auditing & Assurance Services 8e