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) Assessed level of control Risk LOW Moderate Slightly below the maximum Maximum .. What is the planned assessed level of control risk? Tolerable Deviation Rate 2-7% 6-12% 11-20x Over 20% Low Moderate Slightly below the maximum O Maximum b. Determine the appropriate sample size and allowable number of deviations using Eigure 9.4. items Sample size Allowable number of deviations b. Determine the appropriate sample size and allowable number of deviations using Figure 9.4 Sample size Allowable number of deviations items c. Use Figure 95 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.) Circumstance Assessed Level of Control Risk No deviations were included in the sample. One deviation is included in the sample. Eight deviations were included in the sample Achieved Upper Deviation Rate % % % 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) Assessed level of control Risk LOW Moderate Slightly below the maximum Maximum .. What is the planned assessed level of control risk? Tolerable Deviation Rate 2-7% 6-12% 11-20x Over 20% Low Moderate Slightly below the maximum O Maximum b. Determine the appropriate sample size and allowable number of deviations using Eigure 9.4. items Sample size Allowable number of deviations b. Determine the appropriate sample size and allowable number of deviations using Figure 9.4 Sample size Allowable number of deviations items c. Use Figure 95 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.) Circumstance Assessed Level of Control Risk No deviations were included in the sample. One deviation is included in the sample. Eight deviations were included in the sample Achieved Upper Deviation Rate % % %
