In Part V of the Pinnacle Manufacturing case, you prepared a performance format audit program. In Part VI, sample sizes will be determined by using nonstatistical or attributes sampling, and the results of the tests will be evaluated. You should use nonstatistical sampling unless your professor tells you to use statistical sampling. After reviewing the audit program you created in Part V, the audit manager decided to make some modifications. You agreed with her changes. The modified program is included in Figure. The audit manager has decided that the tests should be performed for the first 10 months including the month ended 10/31/11. You determine that document numbers are as follows:
a. Using the audit program in Figure, prepare a nonstatistical sampling data sheet for acquisitions following the format in Figure. Prepare all parts of the sampling data sheet except those that are blank in Figure. A formatted sampling data sheet can be downloaded using the Pinnacle link on the textbook Web site. Use the following guidelines.
(1) Use only one sampling data sheet.
(2) Select the sampling unit that will permit you to perform the most acquisition audit procedures on the audit program.
(3) Include all audit procedures on the audit program that are consistent with the sampling unit you selected.
(4) Decide EPER, TER, and ARACR for each attribute. Consider prior-year results for EPER. Use your judgment for the other two factors.
(5) Decide the sample size for each attribute.
b. Do the same thing for cash disbursements that you did in requirement a for acquisitions. You will not complete the actual results portion of the cash disbursements sampling data sheet.
c. For acquisitions only, use an Excel spreadsheet to select random numbers for the largest sample size in the acquisitions sampling data sheet. Include the numbers in both random order and sorted numbers, from low to high. Document how you selected the numbers.
d. Assume that you performed all audit procedures included in Figure using the sample sizes in requirement a (5). The only exceptions found when you performed the tests include the following: two missing indications of internal verification on a vendor's invoice, one acquisition of inventory transaction recorded for $2,000 more than the amount stated on the vendor's invoice (the vendor was also overpaid by $2,000), and two vendors' invoices recorded as acquisitions several days after the receipt of the goods. Complete the sampling data sheet prepared in requirement a. Use Figure as a frame of reference for completing the sampling data sheet.