Tue 7pm

AVF Company processes an average of 400 vouchers payable every month. Each voucher package contains a copy of the check disbursed and supporting documents such as vendor invoices, receiving reports, and purchase orders. The internal audit plans to examine a sample of vouchers listed in the voucher register using attribute sampling to evaluate the effectiveness of several controls. The attributes of interest include:

Agreement of voucher amounts with invoice amounts.

Voucher canceled after payment.

Based on past experience, the auditor expects deviation rate of 2 percent for the first attribute and 1 percent for the second, He decides on a tolerable deviation rate of 7 percent for the first attribute and 6 percent for the second. He sets the risk of assessing control risk too low at 5 percent.

Assume that the auditor?s tests uncovered two occurrences of voucher amounts not agreeing with invoice amounts and two occurrences of vouchers being canceled after payment.

a.Complete the following schedule. (Note: Round sample size per table up to next number ending in zero for sample size used.)

Attribute 1

Attribute 2

Risk of assessing control risk too low

Tolerable deviation rate

Expected population deviation rate

Sample size per table

Sample size used

Number of deviation rate

Sample deviation rate

Achieved upper deviation limit

b. Evaluate the sample results for the two attributes. Your answer should include:

A statistical conclusion for each attribute.

The audit decision you would make based on the quantitative sample results for each attribute.

Hmwk #11 Acct 422 Tue 7pm AVF Company processes an average of 400 vouchers payable every month. Each voucher package contains a copy of the check disbursed and supporting documents such as vendor invoices, receiving reports, and purchase orders. The internal audit plans to examine a sample of vouchers listed in the voucher register using attribute sampling to evaluate the effectiveness of several controls. The attributes of interest include: Agreement of voucher amounts with invoice amounts. Voucher canceled after payment. Based on past experience, the auditor expects deviation rate of 2 percent for the first attribute and 1 percent for the second, He decides on a tolerable deviation rate of 7 percent for the first attribute and 6 percent for the second. He sets the risk of assessing control risk too low at 5 percent. Assume that the auditor's tests uncovered two occurrences of voucher amounts not agreeing with invoice amounts and two occurrences of vouchers being canceled after payment. a. Complete the following schedule. (Note: Round sample size per table up to next number ending in zero for sample size used.) b. Attribute 1 Attribute 2 Risk of assessing control risk too low Tolerable deviation rate Expected population deviation rate Sample size per table Sample size used Number of deviation rate Sample deviation rate Achieved upper deviation limit b. Evaluate the sample results for the two attributes. Your answer should include: A statistical conclusion for each attribute. The audit decision you would make based on the quantitative sample results for each attribute