Galway Kinnell plans to apply an attributes estimation sampling plan to the shipping controls used by the Raffel & Olds Corporation, a December 31, 1999 year end printing company in New York. Based on a planning meeting with Jack Gilbert, engagement partner, Kinnell assesses the following risks of assessing control risk too low and expected population deviation rates for each of five tests of controls:

The tolerable rate of deviation is .05 for all five tests. Kinnell performs the sampling plan on September 15 and finds one deviation each for tests No. 1(b) (although shipping document #0167, May 21, $21,450 reads 1,200 units, the sales order reads 1,050 units) and No. 4 (although sales invoice #21261, July 12, reads 1,725 units, the inventory records reflect 1,275 units). 

Required: 

Prepare audit working papers to document the attributes estimation sampling plan and the analysis of deviations.

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Risk of Assessing Control Risk Expected Population Deviation Rate .0125 .04 .0075 Test of Control 1. Examine each shipping document to determine whether the document: a. Is accompanied by a sales order bearing Credit and Inventory Control authorization, and b. Agrees with the sales order as to description of goods, quantity, destination, etc. 2. Trace details of sampled shipping documents to copies of shipping documents and their related sales invoices in Billing Department files. 3. Trace details of the related sales invoices to entries in the sales journal and accounts receivable subsidiary ledger. 4. Trace sales invoices to inventory records in Inventory Accounting. Too Low 90 .06 90 .07 .05 .0125 .015 .07 .015