Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
DEPARTMENT OF ACCOUNTANCY UNIVERSITY OF ILLINOIS MEMORANDUM TO: Professor McHugh FROM: Charles DeGarmo _______, Brian Hwang_______, Jared Marciando____, Benji Patzik_______ DATE: December 4 th , 2009 SUBJECT: DDS Sampling Procedures INTRODUCTION In this memorandum, our team will attest to four key assertions made by Dave’s Dating Service ("DDS"). Specifically, DDS asserts the accuracy, completeness and existence of its clients' age, income, high school graduate information and marital status. In order to properly attest to DDS’ assertions, our team first determined and justified the degree of tolerable materiality for each category. Next, we developed our expectations for the 2007 database using outside resources and the form D-1 statistics. Finally, we created a sampling plan and strategy for each category. AGE When clients browse through DDS’ database, they expect that the age of other clients is accurate. As such, our team believes that +/- 5 years appropriately quantifies a threshold for materiality because we do not expect the clientele age to change so drastically in such a short time period. If the average age falls outside of our threshold, we will allocate resources to investigate the underlying reason for the substantial increase or decrease in age. Expectation According to a recent survey, 58% of singles say their acceptable age gap is between 0-5 years when looking for a prospective partner 1 . In 2006, DDS recorded an average age of 42.1 years. Consequently, we expect that the average age of DDS’ clients in 2007 to range between 37.1 years and 47.1 years. In general, our team expects the average age of clients to increase over the year for two key reasons. First, the aging of the “Baby Boomer” generation should increase the average age of the population 2 . Second, high divorce rates lead to an influx of older individuals into the dating industry 3 . Results From the client database in 2007, we calculated an average age of 45.3 years. Since the calculated age is consistent with our expectations, we believe that the assertion regarding the accuracy of clients' age poses a relatively low risk for material misstatement. 1 2 3
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Professor McHugh December 11, 2009 Page 2 Risks However, errors may still exist within the database. For example, DDS representatives could have incorrectly inputted the age of clients into the database, or clients could have misrepresented themselves by lying about their age. Sampling Technique Therefore, our team will use a “non-statistical” sampling methodology to select clients for testing. Furthermore, we will compare the DDS 2007 clientele database with the Secure, Inc. background checks. The population is 1,001 clients and the sampling unit is each individual client. In this sampling procedure, we consider a deviation a difference
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/14/2011 for the course ECON 302 taught by Professor Avrin-rad during the Spring '09 term at University of Illinois, Urbana Champaign.

Page1 / 7


This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online