Chapter 08 Problem 8-26 LO 8-6Use the sample sizes and the number of deviations determined below.Control Procedure235%10 %5%7%2%3 %ParametersRisk of incorrect acceptanceTolerable deviation rateExpected population deviation rateSample size (using tables)Sample size (using IDEA)ResultsNumber of deviationsSample sizeSample deviation rate15 %4%1 %Computed upper deviation rate using Tables1-Sided upper limit using IDEAAuditor's conclusion156156181181Does supportDetermine the sample deviation rate, the computed upper deviation rate, and the auditor's conclusion (i.e., testing results do or do notsupport operating effectiveness of the control) for each control procedure. (For Results, use Table 8-8 & Table 8-9 or IDEA) (Roundyour rates values to 1 decimal place.)0156✔02.0✓✔9494%%%410%8%4%9898X Answer is not complete.Control Procedure2Does not support5181✔2.86.9✓%%%3Does not support494✔4.38.73 333%%%4Does support398✔✔3.1 %7.3 %%✓

Sample deviation rate typically refers to the standard deviation of a sample. Standard deviation…

Chapter 08 Problem 8-26 LO 8-6 Use the sample sizes and the number of deviations determined below. Control Procedure 2 3 5 % 10 % 7% 3% Parameters Risk of incorrect acceptance Tolerable deviation rate Expected population deviation rate Sample size (using tables) Sample size (using IDEA) Results Number of deviations Sample size Sample deviation rate 1 5 % 4% 1 % Computed upper deviation rate using Tables 1-Sided upper limit using IDEA Auditor's conclusion 156 156 1 5% 2% Does support 181 181 Determine the sample deviation rate, the computed upper deviation rate, and the auditor's conclusion (l.e., testing results do or do not support operating effectiveness of the control) for each control procedure. (For Results, use Table 8-8 & Table 8-9 or IDEA) (Round your rates values to 1 decimal place.) 0 156✔ 0 2.0 ✔ 94 94 % % % 4 10% 8% 98 98 > Answer is not complete. Control Procedure 2 Does not support 5 181✔ 2.8 6.9 ✓ % % % 3 Does not support 4 94✔ 4.3 8.7 ✓ % % % 4 Does support 3 98✔ 3.1 % 7.3 % %

Chapter 08 Problem 8-26 LO 8-6 Use the sample sizes and the number of deviations determined below. Control Procedure 2 3 5 % 10 % 7% 3% Parameters Risk of incorrect acceptance Tolerable deviation rate Expected population deviation rate Sample size (using tables) Sample size (using IDEA) Results Number of deviations Sample size Sample deviation rate 1 5 % 4% 1 % Computed upper deviation rate using Tables 1-Sided upper limit using IDEA Auditor's conclusion 156 156 1 5% 2% Does support 181 181 Determine the sample deviation rate, the computed upper deviation rate, and the auditor's conclusion (l.e., testing results do or do not support operating effectiveness of the control) for each control procedure. (For Results, use Table 8-8 & Table 8-9 or IDEA) (Round your rates values to 1 decimal place.) 0 156✔ 0 2.0 ✔ 94 94 % % % 4 10% 8% 98 98 > Answer is not complete. Control Procedure 2 Does not support 5 181✔ 2.8 6.9 ✓ % % % 3 Does not support 4 94✔ 4.3 8.7 ✓ % % % 4 Does support 3 98✔ 3.1 % 7.3 % %

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter8: Specialized Audit Tools: Attributes Sampling, Monetary Unit Sampling, And Data Analytics Tools

Section: Chapter Questions

Problem 15CYBK

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Refer to Exhibit 8.6. Assume a 5% risk of overreliance,a tolerable deviation rate of 8%, a sample size of 100, and that the number of deviations is five. What is the upper limit of the possible deviation rate, and what does it mean? a. 10.3%. The auditor is 95% confident that the real error rate in the population is no greater than 10.3%. b. 10.3%. The auditor is 95% confident that the real error rate in the population is no greater than 5%. c. 5%. The auditor is 92% confident that the real error rate in the population is no greater than 10.3%. d. 5%. The auditor is 92% confident that the real error rate in the population is no greater than 5%.
70 When an auditor does a sampling for attributes, which of the following would decrease sample size? Risk of assessing control risk too low Tolerable rate of Deviation Expected population deviation rate A. Increase Decrease Increase B. Decrease Increase Decrease C. Increase Increase Decrease D. Increase Increase Increase Group of answer choices Choice C Choice B Choice A Choice D
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