Homework Answers
(a) Moderate risk as a percentage of deviation is normal.
(b)sample size should be 3000 to 5000 and the number of deviation 5 to 7 %
(c) Upper deviation Rate Assessed level of risk
20% 10%
7% 2%
12% 4%
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You have been asked to test the effectiveness of Ingo Corporation's control of manually approving...
You have been asked to test the effectiveness of Ingo Corporation’s control of manually approving all...
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...
A. Mason Rowe is testing the effectiveness of an important control for Hart Inc. Rowe is...
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...
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...
Question 23 1 pts The auditor begins selecting controls to test by -- asking management which...
Question 23 1 pts The auditor begins selecting controls to test by -- asking management which controls they would prefer the auditor to test understanding the entity and the business and determining the risk of material fraud or error at the financial statement level checking the same controls as the prior year understanding the entity and all other industries and determining the risk of material fraud or error at the financial statement level D Question 24 1 pts The tolerable...
Ira Icandoit is a staff auditor in the internal audit function of a small manufacturing company...
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...
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...
obtaining an First auditor decided not to perform tests of controls for purposes A. The available evidential matter obtained darough tes control risk of the internal control structure and esing ca...
obtaining an First auditor decided not to perform tests of controls for purposes A. The available evidential matter obtained darough tes control risk of the internal control structure and esing cantrol risk of an eatity.n decided ha most liknly on in the assessed level of control risk a juastified for certain in BA reducti of controls would not support an increased C. It would be inefficient to perforn tests of controls that would result ina tests. controls that would result...
Question: Question 183 Processing auditor test data using the client's software application _______. -will allow the...
Question: Question 183 Processing auditor test data using the client's software application _______. -will allow the auditor to verify manual controls within the software application are functioning as designed -may corrupt the client's system, and should not be attempted -will allow the auditor to verify that the software application is functioning as designed -should be performed without the knowledge of the client's senior management Question 19 The tolerable deviation rate _______. -relates to how many immaterial misstatements the auditor finds...
Non-Stat Sampling Problem You have been assigned to determine if the stated value of inventory is...
Non-Stat Sampling Problem You have been assigned to determine if the stated value of inventory is within tolerable limits. We show a ledger balance of $1,725,882 which contains 1,734 records. We wish to limit audit risk with a tolerable misstatement amount of 6%. We have done similar audit procedures for the last five years and have noted a small error rate and believe a nonstatistical sample will provide sufficient appropriate audit evidence. Planning 1. Objective – 2. Determine the population...
11A–1.A summary of the controls for the revenue and cash receiptscycle of Keystone Computers...
11A–1.A summary of the controls for the revenue and cash receipts
cycle of Keystone Computers & Networks, Inc., appears in this
appendix.For the following three controls over sales, indicate one type
of error or fraud that the control serves to prevent or detect.
Organize your solution as follows:ControlError or Fraud ControlledApplication controls are applied when customer orders are
entered by the sales order clerk.The computer assigns numbers to sales invoices when they are
prepared.Monthly statements are mailed to customers.For 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...
Question 23 1 pts The auditor begins selecting controls to test by -- asking management which controls they would prefer the auditor to test understanding the entity and the business and determining the risk of material fraud or error at the financial statement level checking the same controls as the prior year understanding the entity and all other industries and determining the risk of material fraud or error at the financial statement level D Question 24 1 pts The tolerable...
obtaining an First auditor decided not to perform tests of controls for purposes A. The available evidential matter obtained darough tes control risk of the internal control structure and esing cantrol risk of an eatity.n decided ha most liknly on in the assessed level of control risk a juastified for certain in BA reducti of controls would not support an increased C. It would be inefficient to perforn tests of controls that would result ina tests. controls that would result...
11A–1.A summary of the controls for the revenue and cash receipts
cycle of Keystone Computers & Networks, Inc., appears in this
appendix.For the following three controls over sales, indicate one type
of error or fraud that the control serves to prevent or detect.
Organize your solution as follows:ControlError or Fraud ControlledApplication controls are applied when customer orders are
entered by the sales order clerk.The computer assigns numbers to sales invoices when they are
prepared.Monthly statements are mailed to customers.For the...
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