Francona Madden, an audit manager, considered the control risk assessments listed in theleft column of the following table in evaluating A. Cardinal’s internal control over salestransactions. The sample sizes for the substantive procedures of the customer accountsreceivable are shown to the right of each control risk. What risk of overreliance (ROO)could be assigned for tests of controls at each control risk level? Control Risk Accounts Receivable Sample ROO 0.20 400 ? 0.50 390 ? 0.80 350 ? 0.90 190 10% a. From top to bottom: 5 percent, 10 percent, 1 percent.b. From top to bottom: 10 percent, 1 percent, 5 percent.c. From top to bottom: 1 percent, 10 percent, 5 percent.d. From top to bottom: 1 percent, 5 percent, 10 percent.
Francona Madden, an audit manager, considered the control risk assessments listed in theleft column of the following table in evaluating A. Cardinal’s internal control over salestransactions. The sample sizes for the substantive procedures of the customer accountsreceivable are shown to the right of each control risk. What risk of overreliance (ROO)could be assigned for tests of controls at each control risk level? Control Risk Accounts Receivable Sample ROO 0.20 400 ? 0.50 390 ? 0.80 350 ? 0.90 190 10% a. From top to bottom: 5 percent, 10 percent, 1 percent.b. From top to bottom: 10 percent, 1 percent, 5 percent.c. From top to bottom: 1 percent, 10 percent, 5 percent.d. From top to bottom: 1 percent, 5 percent, 10 percent.
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter5: Professional Auditing Standards And The Audit Opinion Formulation Process
Section: Chapter Questions
Problem 24RQSC
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Question
Francona Madden, an audit manager, considered the control risk assessments listed in the
left column of the following table in evaluating A. Cardinal’s internal control over sales
transactions. The sample sizes for the substantive procedures of the customer accounts
receivable are shown to the right of each control risk. What risk of overreliance (ROO)
could be assigned for tests of controls at each control risk level?
| Control Risk | Accounts Receivable Sample | ROO |
| 0.20 | 400 | ? |
| 0.50 | 390 | ? |
| 0.80 | 350 | ? |
| 0.90 | 190 | 10% |
a. From top to bottom: 5 percent, 10 percent, 1 percent.
b. From top to bottom: 10 percent, 1 percent, 5 percent.
c. From top to bottom: 1 percent, 10 percent, 5 percent.
d. From top to bottom: 1 percent, 5 percent, 10 percent.
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