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% P15-29 (book/static) Question Help Lenter Supply Company is a medium-sized distributor of wholesale hardware supplies in the central Ohio area. It has been a client of yours for several years and has instituted excellent internal controls for sales at your recommendation. (Click the icon to view the information regarding controls over shipments.) In the audit of sales, one of the major concerns is the effectiveness of the controls in ensuring that all shipments are billed. You have decided to use audit sampling in testing internal controls. Read the requirements. (Click the icon to view the table for determining sample size for attributes sampling using an ARO of 5%.) (Click the icon to view the table for determining sample size for attributes sampling using an ARO of 10%.) Requirement a. State an effective audit procedure for testing whether shipments have been billed. What is the sampling unit for the audit procedure? attached. The sampling unit will therefore be the To test whether shipments have been billed, a sample of warehouse removal slips should be selected and examined to see if they have the proper sales invoice warehouse removal slip. Requirement b. Assume that you expect no exceptions in the sample but are willing to accept a TER of 4 percent. At a 5 percent ARO, what is the appropriate sample size for the audit test? You may complete this requirement using attributes sampling. The appropriate sample size for the audit test is 74 Requirement c. Design a random selection plan for selecting the sample from the population, using systematic sampling. Use the sample size determined in part b. Use a random starting point of 11932. (Round to the nearest whole number.) Using systematic sampling, the sample will be selected by beginning with 11932 and then selecting at intervals of Thus, 11932 will be the first selection, will be selected next, followed by and so on. % P15-29 (book/static) Question Help Lenter Supply Company is a medium-sized distributor of wholesale hardware supplies in the central Ohio area. It has been a client of yours for several years and has instituted excellent internal controls for sales at your recommendation. (Click the icon to view the information regarding controls over shipments.) In the audit of sales, one of the major concerns is the effectiveness of the controls in ensuring that all shipments are billed. You have decided to use audit sampling in testing internal controls. Read the requirements. (Click the icon to view the table for determining sample size for attributes sampling using an ARO of 5%.) (Click the icon to view the table for determining sample size for attributes sampling using an ARO of 10%.) Requirement a. State an effective audit procedure for testing whether shipments have been billed. What is the sampling unit for the audit procedure? attached. The sampling unit will therefore be the To test whether shipments have been billed, a sample of warehouse removal slips should be selected and examined to see if they have the proper sales invoice warehouse removal slip. Requirement b. Assume that you expect no exceptions in the sample but are willing to accept a TER of 4 percent. At a 5 percent ARO, what is the appropriate sample size for the audit test? You may complete this requirement using attributes sampling. The appropriate sample size for the audit test is 74 Requirement c. Design a random selection plan for selecting the sample from the population, using systematic sampling. Use the sample size determined in part b. Use a random starting point of 11932. (Round to the nearest whole number.) Using systematic sampling, the sample will be selected by beginning with 11932 and then selecting at intervals of Thus, 11932 will be the first selection, will be selected next, followed by and so on