L11 Notes_Part_14 - without credit approval. If they...

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Statistical Attribute Sampling Plan 2785 0885 4895 2098 8777 5154 0528 8979 2075 3127 1289 5584 7963 4907 4172 9335 5805 2406 5067 3433 7682 2622 1779 6689 4708 2433 0505 6516 8805 3732 8560 4 <= 1-3 5 <= 4-6 6 <= 7-9 Random Sample of 8: 65, 65, 65, 68, 67, 54, 48, 69, 65, 47, 69, 64, 53, 62, 45, 67 , 43 Converting to four digits yields: 4154, 4148, 4147, 4164, 4153, 4162, 4145, 4143 Systematic Sample of 8: 23/8 = 3 is interval Random start 2 4143 4146, 4149, 4152, 4155, 4158, 4161, 4164 Population 4142 through 4164 Mapping of digit in tens place Discards Included Random numbers
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Statistical Attribute Sampling Plan III. Evaluate the Sample 8. Generalize from the sample to the population SDR = sample deviation rate 9. Analyze errors Is there a justifiable reason for apparent non- compliance with a control? Example: the auditors found 7 sales invoices
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Unformatted text preview: without credit approval. If they represent sales to internal departments or subsidiaries, do you really need credit approval? Probably not. 10. Decide whether to rely on internal control UDR < TDR where UDR = SDR + allowance for sampling error 11. Document sample results When an control is judged not effective, what options does the auditor have? Expand the sample size; useful if the control was close to being deemed effective at the assessed level of risk Consider tests of alternative controls Revise the assessed control risk upward increase substantive tests of balances for related accounts (a/r, allowance for doubtful accounts) and transactions (sales, bad debt expense ) Consider implications for integrated audit reporting including classification as a material weakness or a significant deficiency...
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.

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L11 Notes_Part_14 - without credit approval. If they...

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