The questions below relate to determining the CUDR in audit sampling for tests of controls, using the following table:

REQUIRED
a. Using non-statistical sampling, calculate TDR - SDR for each of columns 1 to 8 and evaluate whether or not sampling error is large enough to accept the population. Assume that TDR is 5% for each column.
b. For each of the columns 1 to 8, determine CUDR using attributes sampling from the appropriate table.
c. Using your understanding of the relationship between the four factors in the above table and the CUDR, state the effect on the CUDR (increase or decrease) of changing each of the following factors while the other three are held constant:
(1) a decrease in the ARO
(2) a decrease in the population size
(3) a decrease in the sample size
(4) a decrease in the number of deviations in the sample.
d. Compare your answers in (c) with the results you determined in (a) (non-statistical sampling) or (b) (attributes sampling). Which of the factors appears to have the greatest effect on the CUDR? Which one appears to have the least effect?
e. Why is it necessary to compare the CUDR with the TDR?

4 ARO (%) Population size Sample size Number of deviations 10 500 100 900 100 10 5000 100 0 500 25 0 5000 50 000 5000 5000 200 4 200 4 4