Shield Retail Limited is a manufacturer of leather goods. Until last year, it sold its products locally and recorded all sales in Korean Won. This year, it expanded its business to Japan, Hong Kong, and Taiwan, which now account for less than 5 percent of its total sales.

Shield Retail Limited has been your client for several years and has instituted internal controls for sales at your recommendation. Two of these controls are: (1) credit should be electronically approved based on authorized credit limits preset in the system, and (2) sales invoices should be supported by authorized shipping documents and approved customer orders. Multiple customer orders can be combined to the bill on the sales invoice. The first sales invoice for the year is numbered 53419 and the last one is 74243, and the first customer order for the year is numbered 69443 and the last one
is 94442.

In the audit of sales, one of the major concerns is the effectiveness of the controls in ensuring that the recorded sales tally with shipments.

Question

Assume that you determined to use sampling for the audit procedure to test control (2).

What is the sampling unit?

Answer rating: 100% (QA)

The sampling unit would be customer orders The sample size can be determined by cal... View the full answer