MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN: 9781119256830
Author: Amos Gilat
Publisher: John Wiley & Sons Inc
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b. Calculate the sample size and the sampling interval using Table 8-5, Edwards should use for the following information: (Use the tables, not IDEA, to solve for these problems. Round your interval answer to the nearest dollar amount.)


 

       
Tolerable misstatement $ 15,000  
Expected misstatement $ 6,000  
Desired confidence level   95 %
Recorded amount of accounts receivable $ 300,000  
 

 

**Statistical Sample Sizes for Attribute Sampling — 95-Percent Desired Confidence Level (i.e., 5-Percent Risk of Incorrect Acceptance)**

**Table 8-5**

This table provides statistical sample sizes necessary for attribute sampling under various conditions, specifically with a 95% desired confidence level (equating to a 5% risk of incorrect acceptance). It is used in auditing and quality control environments to determine the number of samples that need to be tested to make reliable inferences about a population.

**Headers:**
- **Expected Population Deviation Rate**: The anticipated rate of deviation within the population.
- **Tolerable Deviation Rate**: The rate of deviation that the auditor is willing to accept.

**Columns:**
- **Expected Population Deviation Rate**: Ranges from 0.00% to 7.00%.
- **Tolerable Deviation Rate**: Varies from 2% to 20%.

Each cell within the table contains two values:
- First value: Indicates the required sample size.
- Value in parentheses: Indicates the maximum number of deviations allowable in the sample for the auditor to conclude that the tolerable deviation rate is not exceeded.

**Important Notes:**
- An asterisk (*) indicates that the sample size required is too large to be cost-effective for most audit purposes.
- The number in parentheses is crucial as it represents the maximum tolerable deviations in the sample size.

For example:
- For an **Expected Population Deviation Rate** of 0.00% and a **Tolerable Deviation Rate** of 2%, the required sample size is 149, and 0 deviations are acceptable.
- Conversely, for the same deviation rate expectation and a tolerable deviation rate of 20%, the required sample size significantly decreases to 14 with 0 deviations acceptable.

**Practical Application:**
Auditors can use this table to determine the number of items to sample when assessing control procedures. If an auditor expects a 1% population deviation and can tolerate a 5% deviation rate, they would need a sample size of 93, accepting up to 1 deviation (see the intersection between the 1.00% row and the 5% column).

**Conclusion:**
This table is a critical resource for ensuring that audits are both effective and efficient, helping auditors to balance between the necessary level of assurance and practical constraints like time and cost.
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Transcribed Image Text:**Statistical Sample Sizes for Attribute Sampling — 95-Percent Desired Confidence Level (i.e., 5-Percent Risk of Incorrect Acceptance)** **Table 8-5** This table provides statistical sample sizes necessary for attribute sampling under various conditions, specifically with a 95% desired confidence level (equating to a 5% risk of incorrect acceptance). It is used in auditing and quality control environments to determine the number of samples that need to be tested to make reliable inferences about a population. **Headers:** - **Expected Population Deviation Rate**: The anticipated rate of deviation within the population. - **Tolerable Deviation Rate**: The rate of deviation that the auditor is willing to accept. **Columns:** - **Expected Population Deviation Rate**: Ranges from 0.00% to 7.00%. - **Tolerable Deviation Rate**: Varies from 2% to 20%. Each cell within the table contains two values: - First value: Indicates the required sample size. - Value in parentheses: Indicates the maximum number of deviations allowable in the sample for the auditor to conclude that the tolerable deviation rate is not exceeded. **Important Notes:** - An asterisk (*) indicates that the sample size required is too large to be cost-effective for most audit purposes. - The number in parentheses is crucial as it represents the maximum tolerable deviations in the sample size. For example: - For an **Expected Population Deviation Rate** of 0.00% and a **Tolerable Deviation Rate** of 2%, the required sample size is 149, and 0 deviations are acceptable. - Conversely, for the same deviation rate expectation and a tolerable deviation rate of 20%, the required sample size significantly decreases to 14 with 0 deviations acceptable. **Practical Application:** Auditors can use this table to determine the number of items to sample when assessing control procedures. If an auditor expects a 1% population deviation and can tolerate a 5% deviation rate, they would need a sample size of 93, accepting up to 1 deviation (see the intersection between the 1.00% row and the 5% column). **Conclusion:** This table is a critical resource for ensuring that audits are both effective and efficient, helping auditors to balance between the necessary level of assurance and practical constraints like time and cost.
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