Management and Auditing

Anonymous
timer Asked: Nov 17th, 2016

Question description

DO NOT ACCEPT IF YOU DO NOT UNDERSTAND OR CANNOT MEET THE DEADLINE

I need help with the following:

Part 1

Apply a risk assessment technique to decision making by using the following example:

Assume that you are going to use nonstatistical sampling to evaluate the results of accounts receivable confirmation for the Bovar audit. Results from previous audits have been excellent. Because of the high quality of the controls at Bovar, you have decided to use an acceptable risk of incorrect acceptance of 10%. There are 3,000 accounts receivable with a gross value of $9,601,883. You have decided that an overstatement or understatement of more than $150,000 would be considered material.

Complete the following:

  • Calculate the required sample size using the following formula:
    • Sample size = (book value of population / tolerable misstatement) x assurance factor
      • Assurance factor:
        • 5% ARIA = 3
        • 10% ARIA = 2
        • 20% ARIA = 1
  • Assume that instead of good results from previous audits, Bovar had poor results and the controls in place were questionable. Discuss the following:
    • How would this affect your sample size?
    • How would you use this information in your sample size determination?
    • How would you select the accounts for testing using systematic selection?
    Part IIPrepare a 2-page document that discusses the following:
    • Auditing principles
    • Code of conduct

Tutor Answer

(Top Tutor) Studypool Tutor
School: University of Maryland
Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags
Study Guides

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors