Comprehensive Attributes Sampling. Audra Dodge, CPA, is performing an attributessampling plan for her audit of Truck Company. In her audit of cash disbursements, she hasidentified preparing a voucher and marking it as “paid” prior to preparing and mailing acheck to the vendor as an important control. Dodge defined any voucher that was not markedas “paid” as being a deviation. In performing her sampling application, she established the following parameters:Risk of overreliance 5%Expected population deviation rate 1.5%Tolerable rate of deviation 4%Required:a. Identify what factors Dodge considered in establishing the risk of overreliance, expectedpopulation deviation rate, and tolerable rate of deviation.b. Assume that Dodge wished to place additional reliance on this control. How would thataffect the three parameters in part (a)?c. Based on the original parameters, use AICPA sample size tables to determine the appropriate sample size.d. If Dodge selected the sample size in part (c) and found four deviations, what is the sample rate of deviation?e. Using AICPA sample evaluation tables, determine the ULRD. (Note: If the sample sizecannot be directly located on the sample evaluation table, round down to the next highestsample size.)f. What would Dodge’s conclusion be with respect to the functioning of this control?
Comprehensive Attributes Sampling. Audra Dodge, CPA, is performing an attributes
sampling plan for her audit of Truck Company. In her audit of cash disbursements, she has
identified preparing a voucher and marking it as “paid” prior to preparing and mailing a
check to the vendor as an important control. Dodge defined any voucher that was not marked
as “paid” as being a deviation.
In performing her sampling application, she established the following parameters:
Risk of overreliance 5%
Expected population deviation rate 1.5%
Tolerable rate of deviation 4%
Required:
a. Identify what factors Dodge considered in establishing the risk of overreliance, expected
population deviation rate, and tolerable rate of deviation.
b. Assume that Dodge wished to place additional reliance on this control. How would that
affect the three parameters in part (a)?
c. Based on the original parameters, use AICPA
d. If Dodge selected the sample size in part (c) and found four deviations, what is the sample rate of deviation?
e. Using AICPA sample evaluation tables, determine the ULRD. (Note: If the sample size
cannot be directly located on the sample evaluation table, round down to the next highest
sample size.)
f. What would Dodge’s conclusion be with respect to the functioning of this control?
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