. Assume that the tolerable deviation rate is 12%. For each of the items (a) through (d) state the upper Limit of Deviations and include the appropriate conclusion as to whether the control is operating effectively.
Risk of Over Reliance Sample Size Number of Deviations Upper Limit of Deviations? Control Operating? (yes or no)
a. 5% 20 0
b. 5% 75 5
c. 10% 75 5
d. 10% 150 10
We need at least 10 more requests to produce the answer.
0 / 10 have requested this problem solution
The more requests, the faster the answer.
. Assume that the tolerable deviation rate is 12%. For each of the items (a) through...
A. Mason Rowe is testing the effectiveness of an important control for Hart Inc. Rowe is placing a high level of reliance on this control and has assessed a relatively low risk of assessing control risk too low (5 percent) and tolerable rate of deviation (6 percent). Based on the acceptable risk of overreliance, expected population deviation rate, and tolerable rate of deviation, Rowe determined a sample size of 60 items. The tests of controls revealed three deviations. Required: Calculate...
Mason Rowe is testing the effectiveness of an important control for Hart Inc. Rowe is placing a high level of reliance on this control and has assessed a relatively low risk of assessing control risk too low (5 percent) and tolerable rate of deviation (6 percent). Based on the acceptable risk of overreliance, expected population deviation rate, and tolerable rate of deviation, Rowe determined a sample size of 60 items. The tests of controls revealed three deviations. Required: Calculate the...
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 8
percent (although she expects the rate to be only approximately
1.75 percent) and a 5 percent risk of assessing control risk too
low. Use the following to determine the planned assessed...
15
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. Jan Zhang, CPA, your supervisor asked you to use a tolerable deviation rate of 5 percent (although she expects the rate to be only approximately 0.50 percent) and a 5 percent risk of assessing control risk too low. Use the following to determine the planned...
Ira Icandoit is a staff auditor in the internal audit function of a small manufacturing company located in western Kansas. Ira recently completed a professional development course on a statistical sampling and is very excited about the new knowledge he has gained. He decided to apply his newly gained knowledge during the audit to which he had just been assigned. He used attribute sampling when he performed his tests of controls over the company’s procurement transactions. Ira figured that a...
Ira Icandoit is a staff auditor in the internal audit function of a small manufacturing company located in western Kansas. Ira recently completed a professional development course on a statistical sampling and is very excited about the new knowledge he has gained. He decided to apply his newly gained knowledge during the audit to which he had just been assigned. He used attribute sampling when he performed his tests of controls over the company’s procurement transactions. Ira figured that a...
For each item, select the proper statistical term. Terms are only used once and each item has only one correct answer. - A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. P. Hanna, CPA, identified the item in which...
2. Fernanda Calle Clothing Company manufactures high-quality sikties that are marketed under a number of trademarked names. Capone & Celestin have been the company's auditors for five years. Chase Cetta, the senior-in-charge of the audit, has reviewed Fernanda Calle Clothing Company's control over purchasing and Inventory, and has determined that a number of controls can be relied upon to reduce control risk. Chase Cetta has decided to test two control procedures over purchases and inventory: (1) purchase orders are agreed...
Gurjot Gill Clothing Company manufactures high-quality silk ties that are marketed under a number of trademarked names. Capone & Celestin have been the company's auditors for five years. Chrisel Gladson, the senior-in-charge of the audit, has reviewed Gurjot Gill Clothing Company's controls over purchasing and inventory, and has determined that a number of controls can be relied upon to reduce control risk. Chrisel Gladson has decided to test two control procedures over purchases and inventory: (1) purchase orders are agreed...
Gurjot Gill Clothing Company manufactures high-quality silk ties that are marketed under a number of trademarked names. Capone & Celestin have been the company's auditors for five years. Chrisel Gladson, the senior-in-charge of the audit, has reviewed Gurjot Gill Clothing Company's controls over purchasing and inventory, and has determined that a number of controls can be relied upon to reduce control risk. Chrisel Gladson has decided to test two control procedures over purchases and inventory: (1) purchase orders are agreed...