Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have been asked to test the effectiveness of Ingo Corporation's control of manually approving all purchases over $ 2 5 , 0 0 0

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 1.25 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.
\table[[(Planned) Assessed Level of Control Risk,\table[[Tolerable],[Deviation],[Rate]]],[\table[[Low],[Moderate]],2-7%
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Finance For Non Finance Managers

Authors: Jai Kumar Batra

1st Edition

9352806964, 978-9352806966

More Books

Students also viewed these Accounting questions