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You have been asked to test the effectiveness of Ingo Corporation controls 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 $25000. Jian Zhang, CPA, your supervisor, asked you to use a tolerable deviation rate of 4% (although she expects the rate to be only appropriately 0.25 percent) and a 5 percent risk of assessing control risk too low.What is the planned level of control risk?

You have been asked to test the effectiveness of Ingo Corporation controls 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 $25000. Jian Zhang, CPA, your supervisor, asked you to use a tolerable deviation rate of 4% (although she expects the rate to be only appropriately 0.25 percent) and a 5 percent risk of assessing control risk too low.What is the planned level of control risk?

Auditing: A Risk Based-Approach (MindTap Course List)
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
Chapter8: Specialized Audit Tools: Attributes Sampling, Monetary Unit Sampling, And Data Analytics Tools
Section: Chapter Questions
Problem 30RQSC
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You have been asked to test the effectiveness of Ingo Corporation controls 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 $25000. Jian Zhang, CPA, your supervisor, asked you to use a tolerable deviation rate of 4% (although she expects the rate to be only appropriately 0.25 percent) and a 5 percent risk of assessing control risk too low.What is the planned level of control risk?

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