You have been asked to test the effectiveness of Ingo Corporation's control of manually approving all purchases over $25,000. During the year, Ingo Corporation has made 1,000,000 purchases of which 3,000 were over $25,000. Jian Zhang, CPA, your supervisor, asked you to use a tolerable deviation rate of 4 percent (although she expects the rate to be only approximately 0.25 percent) and a 5 percent risk of assessing control risk too low. Use the following to determine the planned assessed level of control risk and the assessed level of control risk. (Planned) Asses and level of Control Risk Low Moderate Slightly below the maximum Maximum Tolerable Deviation Rate 2-74 6-120 11-200 Over 20 a. What is the planned assessed level of control risk? Low Moderate Slightly below the maximum Maximum b. Determine the appropriate sample size and allowable number of deviations using Eigure 94. Answer is complete but not entirely correct. 66 items Sample size Allowable number of deviations c. Use Eigure 9.5 to determine the achieved upper deviation rate and the above table to determine the assessed level of control risk under the following circumstances. Assume that the sample size was 100 items (Round your answers to 1 decimal place.) Answer is complete but not entirely correct. Achieved Upper Assessed Level of Circumstance Deviation Rate Control Risk No deviations were included in the sample 54% Low One deviation is included in the sample 8.4 % Moderate 18.2% Maximum Four deviations were included in the sample ooo FIGURE 94 Statistical Samples for Tots of Control Pere Risk of Asing Control Risk Ton Low (with Allowable Number of Desiatimin Parenthe Tolerable Deviation Rate 25 1490) 2.36(1) . Expected Population Deviation Rate (As Percentages) 0.00% 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 35 49 55 75 8 99 990) 7410) 590) 4910) 42001 3601 320 157(1) 117(1) 931) 7820 6611 58( 510 157(1) 117() 91) 78(1) XS 58/13 51(1 205021 117(1) 931) 7861) 06/13 5841) SIT 1562) 931) 7861) 664 580) 510 1562) 124(2) 78(1) 6011) SIY 51(1) 192(3) 12402) 1032) 620 581 Si(1) 227(4) 153(3) 103(2) 68:29 77021 51(1) 1814) 1273) 882) 7723 6842) 208(5) 1273) 82) 772) 6502 150(4) 1093 7712) 682) 173(5) 1063 9503) 6512) 195(6) 129(4) 953) 843) . 14815) 1124) 3403 1676 11264) 84033 1857 1295) 100(4) 1-466) 100141 158189 104 155 2015 2010) 190) (0) 161) 30(1) 22(1) 4611 301) 221 40 JON 2211 1611) 3001) 22() 161) 30X1) 2201 4611) 3011) 3200 461) SOC) 2201 460 301Y 2211) 6112 301 2201 6102) 3011) 220 6102) 30%) 2201 6112) 30/1) 2201 612) 301) 22/1) 7643) 402) 2200 763 302) 22(1) 894) 4082) 221 11666) 4002) 302 179011) 50(3) 30:21 635) 373) 3.00 3.25 3.50 3.75 4.00 5.00 6.00 700 FIGURE 9.5 Statistical Sampling Results Evaluation Table for Tests of Controls: Achieved Upper Deviation Rate at 5 Percent Risk of Assessing Control Risk Too Low Sample Size 25 30 35 40 3 45 0 11.3 9.5 8.3 7.3 6.5 5.9 5.4 4.9 4.6 4.2 * 50 55 60 65 70 75 80 90 100 125 Actual Number of Deviations Found 1 2 3 4 5 6 7 9 10 17.6 14.9 19.6 12.9 17.0 * 11.4 15.0 18.3 10.2 13.4 16.4 19.2 9.2 12.1 14.8 17.4 19.9 8.4 11.1 13.5 15.9 18.2 7.7 10.2 12.5 14.7 16.8 18.8 7.1 9.4 11.5 13.6 15.5 17.4 19.3 6.6 8.8 10.8 12.6 14.5 16.3 18.0 19.7 6.2 10.1 11.8 13.6 15.2 16.9 18.5 20.0 5.8 7.7 9.5 11.1 12.7 14.3 15.9 17.4 18.9 5.2 6.9 8.4 9.9 11.4 12.8 14.2 15.5 16.8 18.2 4.7 6.2 7.6 9.0 10.3 11.5 12.8 14.0 15.2 16.4 3.8 5.0 6.1 7.2 8.3 9.3 10.3 11.3 12.3 13.2 4.2 5.1 6.0 3.2 6.9 8.6 7.8 9.5 10.3 11.1 3.9 3.2 4.6 2.4 5.9 5.2 7.2 7.8 8.4 6.5 4.0 8.2 3.7 3.3 3.0 2.4 2.0 1.5 150 200