Requirement a. For each population, did the auditor select a smaller sample size than is indicated by using the attributes sampling tables for determining sample size? What are the implications of selecting either a larger or smaller sample size than those determined using the tables?

	Population
	1	2	3	4	5	6
Actual sample size	80	100	20	100	70	60
Sample size per attribute sampling table
Did the auditor select a smaller or larger sample than suggested by the table?

Part 2

Evaluate selecting either a larger or smaller size than those determined in the tables.

The effect of selecting a smaller sample size than the initial sample size required from the table is the

decreased

increased

likelihood of having the CUER exceed the TER. If a larger sample size is selected, the result may be a sample size

larger

smaller

than needed to satisfy TER. That results in

excess

lower

audit cost.

Part 3

Requirement b. Calculate the SER and CUER for each population. (Enter your answers to the nearest tenth percent and exclude the percent sign, X.X. Enter a "0" for any zero balances.)

	Population
	1		2		3		4		5		6
EPER (in percent)	2	%	0.5	%	1	%	0	%	2	%	5	%
TER (in percent)	7	%	5	%	20	%	2	%	9	%	10	%
ARO (in percent)	10	%	5	%	10	%	5	%	5	%	10	%
Actual sample size	80		100		20		100		70		60
Actual number of exceptions in the sample	2		3		1		1		1		5
SER (in percent)		%		%		%		%		%		%
CUER (in percent)		%		%		%		%		%

Part 4

Requirement c. For which of the six populations should the sample results be considered unacceptable? What options are available to the auditor?

The sample results are unacceptable for populations

2, 3, 4, and 5

2, 4, and 6

3 and 5

. In each of those cases, the

ARO

CUER

EPER

SER

TER

exceeds

ARO

CUER

EPER

SER

TER

.

Part 5

What options are available to the auditor? (Select all that apply.)

A.

Increase the sample size

B.

Change TER

C.

Decrease the sample size

D.

Perform other substantive tests to determine whether there are actually material misstatements in the population.

E.

Change ARO

Part 6

Requirement d. Why is analysis of the exceptions necessary even when the populations are considered acceptable?

Analysis of exceptions

is

is not

necessary when the population is acceptable because

an acceptable population will yield valid results regarding population misstatements.

the auditor still needs to determine the actual dollar value of misstatements in the population.

the auditor wants to determine the nature and cause of all exceptions.

Part 7

Requirement e. For the following terms, identify which is an audit decision, a nonstatistical estimate made by the auditor, a sample result, and a statistical conclusion about the population:

(1)	EPER
(2)	TER
(3)	ARO
(4)	Actual sample size
(5)	Actual number of exceptions in the sample
(6)	SER
(7)	CUER