You are a staff auditor who has been assigned the task of testing controls related to salary expense. You are making a statistical sample of payments to be tested.  Some relevant information is provided to you by your senior and is as follows:

-- Tolerable deviation/exception rate: 15%

-- Acceptable Risk of Overreliance: 5%

-- Estimated population deviation/exception rate: 0.5%

Click the word "tables" to access the tables to answer this question

Determine the minimum sample size based on the above parameters (2 marks) 

Your senior auditor reviewed your sample size calculation, but also decided to use her judgment in determining the sample size and chose to conduct the tests on 50 payments.  You therefore selected the 50 payments and performed the tests. You found three payments recorded which did not have supporting documents. Does the control pass or fail?  Justify.

If the population consists of 10,000 payments, and the control has to apply to every payment, how many times does the control not work in the population? 

Answer rating: 100% (QA)

An auditor for a large service company is performing an audit of the companys cash balance The auditor is considering the most appropriate audit procedure to use to ensure that the amount of cash is a... View the full answer