15-37 (OBJECTIVES 15-3, 15-6, 15-7) This problem is based on the JA Tires data that was...

 

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15-37 (OBJECTIVES 15-3, 15-6, 15-7) This problem is based on the JA Tires data that was intro- duced in early chapters. In problem 14-32 you used audit software to test the entire popula- tion of transactions for certain attributes. However, assume the following attributes will be Analytics tested for a sample of the sales transactions: Data Required 1. Verify the existence of the customer included in the customer master file. 2. Verify that shipping and sales tax were correctly computed in accordance with com- pany policy. 3. Agree the quantity on the sales invoice to the customer order. 4. Agree invoice amounts to subsequent customer payment. 5. Determine whether any price adjustments or discounts were properly authorized. a. Determine the appropriate statistical sample size for each attribute using audit software or the sampling table in Table 15-8 (p. 519). Assume an EPER of 0 percent and ARO of 10 percent for all attributes. TER is 5 percent for attributes 1 and 5 and 6 percent for attributes 2, 3, and 4. b. Assume you decided to select a sample of 50 for all attributes. Select a random sample using audit software or the Excel RANDBETWEEN function. c. Assume you performed the tests and found two exceptions for attribute 3 and one exception for attribute 5. Calculate CUER based on ARO of 10 percent and the sample size of 50 using audit software or Table 15-9 (p. 521). d. Were any of the results unacceptable? Explain. 15-37 (OBJECTIVES 15-3, 15-6, 15-7) This problem is based on the JA Tires data that was intro- duced in early chapters. In problem 14-32 you used audit software to test the entire popula- tion of transactions for certain attributes. However, assume the following attributes will be Analytics tested for a sample of the sales transactions: Data Required 1. Verify the existence of the customer included in the customer master file. 2. Verify that shipping and sales tax were correctly computed in accordance with com- pany policy. 3. Agree the quantity on the sales invoice to the customer order. 4. Agree invoice amounts to subsequent customer payment. 5. Determine whether any price adjustments or discounts were properly authorized. a. Determine the appropriate statistical sample size for each attribute using audit software or the sampling table in Table 15-8 (p. 519). Assume an EPER of 0 percent and ARO of 10 percent for all attributes. TER is 5 percent for attributes 1 and 5 and 6 percent for attributes 2, 3, and 4. b. Assume you decided to select a sample of 50 for all attributes. Select a random sample using audit software or the Excel RANDBETWEEN function. c. Assume you performed the tests and found two exceptions for attribute 3 and one exception for attribute 5. Calculate CUER based on ARO of 10 percent and the sample size of 50 using audit software or Table 15-9 (p. 521). d. Were any of the results unacceptable? Explain.

Answer rating: 100% (QA)

a To determine the appropriate statistical sample size for each attribute we need to consider the EPER Expected Population Exception Rate ARO Assumed ... View the full answer