An auditor is applying statistical sampling for attributes to the testing of extensions on sales invoices. There are 250 invoices with an average of four sales on each invoice. The auditor uses 1,000 as the population total and classifies each extension mistake as a deviation. The auditor decides to use a 10 percent risk of assessing control risk too low, a planned tolerable rate of 5.2 percent, and an estimated deviation rate of 2 percent. Assume the following deviation condition exists in the population. (The invoices are numbered \(1-250\); the lines are numbered \(1-1000\).)

Required:

a. Calculate the sample size.

b. Take the sample using random selection. Identify the numbers in the random number set with the lines \(1-1000\). For example, random number 102 is line 102 , and so on. If you select a line number listed in the preceding deviation chart, assume that a deviation is located.

c. Quantitatively evaluate your sample results. If you incorrectly rejected the sample results, why did this happen?

d. Would the dollar amount of the deviations you found change the evaluation of your results? Why or why not?

Amount of Error results in overstatement (O) or understatement (U) of sales Invoice no. Line no. deviation 10 39 $ 100 21 81 350 51 202 900 53 220 700 61 240 950 70 291 300 102 410 41 103 413 850 150 600 1000 170 674 150 192 798 500 203 840 350 210 855 520 215 890 925 224 906 820 225 908 1000 231 930 10 250 971 900