Question: As indicated on the working paper on page 490 the

As indicated on the working paper on page 490, the auditors decided to apply audit sampling to three controls for the revenue and cash receipts cycle.
a. Describe the characteristic that a control must possess in order to be tested with audit sampling.
b. Assume that the auditors decided to use audit sampling to test the operating effectiveness of the procedures for matching sales invoices with delivery receipts. Determine the required sample size, using the following parameters.
• Risk of assessing control risk too low—5 percent
• Tolerable deviation rate—15 percent
• Expected deviation rate—1 percent
c. Prepare a working paper similar to the one on page 490 documenting the planned audit procedure described in part (b).

  • CreatedOctober 27, 2014
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