EP AUDITING+ASSURANCE...-MYACCT.LAB
16th Edition
ISBN: 9780134148656
Author: ARENS
Publisher: PEARSON CO
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Question
Chapter 17, Problem 23DQP
a.
To determine
Calculate the required
b.
To determine
Explain the manner in which the statement given will affect the sample size and explain the manner in which the information could be used in ascertaining the sample size.
c.
To determine
Specify the manner in which the accounts for testing using systematic selection could be selected.
d.
To determine
Examine whether the population is stated fairly.
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Comprehensive Problem: Monetary Unit Sampling. Dylan Mays is auditing the accountsreceivable of Channel Company. Channel’s accounts receivable were recorded at $2,000,000and comprised more than 1,500 customer accounts. However, Channel’s ten largest customers’ balances comprised a high percentage of the recorded accounts receivable (over$500,000, or 25 percent). As a result, Mays is considering the use of MUS.Based on prior audits and other judgments, Mays has established the following parameters:
Risk of incorrect acceptance
5%
Tolerable misstatement
$120,000
Expected misstatement
$ 24,000
Required:a. Briefly identify what factors Mays should consider in determining sample size and howthese factors would be assessed.b. Calculate the necessary sample size and sampling interval used by Mays in the audit ofChannel Company.c. Given the information in part (b), describe how Mays would select the sample fromChannel’s computerized accounts receivable ledger.d. [Note: Part (d) is…
The auditor of Tent manufacturing Ltd has decided to use systematic selection of cash payments when testing the control that cheque payments are supported by a supplier’s invoice, a purchase requisition and a goods received note. Each cheque comprises a sampling unit. There are 4000 cheques drawn (numbered 1–4000) and the total amount of cash payments is $12 million. The sample size is 25 and the random start is 205. Given this information, the second item selected will be item no:Select one:a. Cheque number 2415.b. Cheque number 160.c. Cheque number 365.d. Some other item number.
You are using sampling to test the following control: all credit sales over $1,000 require a credit check. What is the population for your test?
Chapter 17 Solutions
EP AUDITING+ASSURANCE...-MYACCT.LAB
Ch. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - Prob. 10RQ
Ch. 17 - Prob. 11RQCh. 17 - Prob. 12RQCh. 17 - Prob. 13RQCh. 17 - Prob. 14RQCh. 17 - Prob. 15RQCh. 17 - Prob. 16RQCh. 17 - Prob. 17RQCh. 17 - Prob. 18RQCh. 17 - Prob. 19.1MCQCh. 17 - Prob. 19.3MCQCh. 17 - Prob. 19.2MCQCh. 17 - Prob. 20.1MCQCh. 17 - Prob. 20.2MCQCh. 17 - Prob. 20.3MCQCh. 17 - Prob. 21.1MCQCh. 17 - Prob. 21.3MCQCh. 17 - Prob. 21.2MCQCh. 17 - Prob. 22.1MCQCh. 17 - Prob. 22.2MCQCh. 17 - Prob. 22.3MCQCh. 17 - Prob. 23DQPCh. 17 - Prob. 24DQPCh. 17 - Prob. 25DQPCh. 17 - Prob. 26DQPCh. 17 - Prob. 27DQPCh. 17 - Prob. 28DQPCh. 17 - Prob. 29DQPCh. 17 - Prob. 30DQPCh. 17 - Prob. 31CCh. 17 - Prob. 32C
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