Assume you are considering controls over a client's purchasing activities, and estimate the following for acceptable risk of assessing control risk too low, tolerable rate of deviation, and expected population deviation rate:

Required: 

1. Using Figure 8-4 as a guide, prepare a worksheet documenting the attribute estimation sampling results for the attributes above. Your worksheet should indicate required sample size determined (and sample size used, if different), estimated population deviation rate, and maximum population deviation rate.

2. Write a statistical conclusion and an audit conclusion for each attribute.

Transcribed Image Text:

Risk of Assessing Control Risk Too Low Tolerable Rate of Deviation Expected Population Deviation Rate .07 .05 20 .01 .015 .06 .0125 90 40 .07 10 Attribute 1. Voucher package (e.g., purchase requisition, purchase order, receiving report, and invoice) is canceled after payment is made. 2. Purchase is properly authorized. 3. Details on purchase requisition, purchase order, receiving report, and invoice agree. 4. Purchase order in voucher package agrees with copy filed in the purchasing department. 5. Canceled checks contain appropriate signatures and endorsements. 6. Details on voucher package agree with canceled check (e.g., check number, date, payee, and amount). The sampling results for each attribute follow: .05 55 .05 50 .05 .10 .05 59 05 .05 Number of Attribute Deviations 1 2 221422 23456 .08. 80 80 .08 .035 .02 70 .03 60