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

Required
a. Using nonstatistical sampling, calculate TER €“ SER for each of columns 1 through 8 and evaluate whether or not sampling error is large enough to accept the population.
Assume that TER is 5% for each column.
b. For each of the columns 1 through 8, determine CUER using attributes sampling from the appropriate table.
c. Using your understanding of the relationship between the four preceding factors and the CUER, state the effect on the CUER (increase or decrease) of changing each of the following factors while the other three are held constant:
(1) A decrease in the ARACR
(2) A decrease in the population size
(3) A decrease in the sample size
(4) A decrease in the number of exceptions in the sample
d. Compare your answers in part c with the results you determined in part a (nonstatistical sampling) or part b (attributes sampling). Which of the factors appears to have the greatest effect on the CUER? Which one appears to have the least effect?
e. Why is it necessary to compare the CUER with theTER?

ARACR (in percent) Population size Sample size Number of exceptions 10 50,000 500 5,000 5,000 5,000 900 5,000 500 100 25 200 100 200 200 4 50 100 10 4