During an audit of Potter Company, an auditor needs to estimate the total value of the 5,000 invoices processed during June. The auditor estimates the standard deviation of the population to be $30. Determine the size sample the auditor would select to achieve an allowance for sampling risk (precision) of ±$25,000 with 4.6 percent risk of incorrect rejection.
Answer to relevant QuestionsThe public accounting firm of Hanson and Brown was expanding very rapidly. Consequently, it hired several staff assistants, including James Small. Subsequently, the partners of the firm became dissatisfied with Small's ...Multiple Choice QuestionsSelect the best answer for each of the following questions. Explain the reasons for your selection.a. Which of the following is an element of sampling risk?(1) Choosing an audit procedure that is ...You are the auditor of Jexel, an auto air conditioner service and repair company, and you have decided to use the mean-per-unit method to test the existence and gross valuation of recorded accounts receivable. The client’s ...Explain what is meant by the following statement: “When sampling, the auditors should determine that the physical representation of the actual population is complete.”What options are available to an auditor when the client’s book value falls outside the acceptance interval calculated using the estimate of the total value of the population (the adjusted allowance for sampling risk)?
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