As the auditor for the Harns Company, you elect to use statistical sampling in performing tests of
Question:
As the auditor for the Harns Company, you elect to use statistical sampling in performing tests of sales transactions. You decide to use shipping documents for the purpose of testing whether all shipments have been billed. The shipping document is selected as the sampling unit. There are 5,000 shipping documents in the population and you elect to use random sampling in drawing your sample. Pertinent data concerning attributes of interest are as follows:
Assume that the results of the sample reveal the following number of occurrences for each attribute: (1) 2 , (2) 1 , (3) 2 , (4) 3 , (5) 1 , (6) 0.
Required:
a. Prepare a sampling plan worksheet using Figure 5-8 as an example.
b. Statistically interpret the results of the sample.
c. Explain the alternative courses of action that are available to the auditor when achieved precision exceeds desired precision.
Step by Step Answer:
Modern Auditing
ISBN: 9780471542834
5th Edition
Authors: Walter Gerry Kell, William C. Boynton, Richard E. Ziegler