Items are submitted for inspection in lots of size 12000 using ANSI/ASQC Z1.4 (a.k.a.MIL-STD-105-E). The acceptable quality level is 2.5% nonconforming. Generalinspection level III and a single sampling plan are used. Normal inspection is initiated atthe start of the inspection of lot 1. The inspection results for 24 consecutive lots are asfollows:910 1112 20 8242022522 2222122123 24Lot12345Nonconforming 2414221710itemsLot1314 15Nonconforming 1788541551617667186818 19 20 217214 18 20 21182722512 17itemsa) Use the switching rules listed in the lecture notes to determine the sampling plansand the types of inspection used for lots 2, 6, 13, 20, 22 and 24. State whethereach one of lots 1-24 should be accepted or rejected. State the type of inspectionthat will be used for lot 25.b) Draw the OC curve for the single sampling plan that will be used for lot 25.

Part (a): Determine Sampling Plans, Inspection Types, and Lot Acceptance/RejectionGiven Data:Lot…

Answered: Items are submitted for inspection in…

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter8: Specialized Audit Tools: Sampling And Generalized Audit Software

Section: Chapter Questions

Problem 62RSCQ

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From the sampling information provided below, determine the projected error for each scenario independently and conclude on the impact to materiality if performance materiality is set at $6,500. (Round answers to O decimal places, eg. 5,275. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) Scenario 1 2 3 Error $(3,244) $4,500 $2,721 Sample $43.100 $11,000 $20,568 Population $64,960 $19,000 $52,456 $ $ $ Projected Error Impact
Using Appendix B of this book, select a simple random sample of 10 numbers in the range from 1 to 9,876. What is each step in the process?
Calculate total projected mistreatment if the following three mistreatments were discovered in a PPS sample when the sampling interval is $1,000. Recorded Amount Audit Amount Sampling interval Total Projected Mistreatment 1st mistreatment $400 $320 $1,000 _________________ 2nd mistreatment 500 0 $1,000 _________________ 3rd mistreatment 3,000 2,500 $1,000 _________________
15. An account balance is $200,000 and there are 70 items in the account, five of which have balances that equal or exceed $16,000. The auditor plans to use a dollar-unit sampling plan with systematic sample selection. To ensure that all accounts with balances of at least $16,000 are selected, the sampling interval should be (2 Points) 16,000 60,000 15,000 O 40,000 16. The auditor plans to use a dollar-unit sampling plan with systematic sample selection, If the Tolerable misstatement 20,000 and the population is 250,000 and the Confidence factor is 2.77 at 10% ARIA. The sample size is approximately: (2 Points) 35 13 28 8
Subject - account Please help me. Thankyou.
Sample Size Relationships: Monetary Unit Sampling. For each of the following cases, provide the missing information. Recorded balance $1,500,000 $190,000 (C) Sample size 115 (B) 124 Sampling interval (A) $4,222 $18,000
You are auditing the financial statements of Blue Pty Ltd, a whitegoods wholesaler. You ask the audit junior to assist you to test whether or not purchases of equipment are fairly stated. You tell him that you will use dollar unit sampling. Your assistant provides you with the information in the table below. Number of purchases 6,000 Amount of purchases $6,000,000 Sample size 60 Dollar value of sample $600,000 Materiality allocated $60,000 Error found in the sample $600 REQUIRED: Draw a conclusion, on the basis of the information provided, as towhether or not purchases are fairly stated. Explain your answer and show all calculations.
Sample Selection: Monetary Unit Sampling. Emerson Washburn is examining theaccounts receivable of Anaheim Company and has decided to use MUS to select a sample ofcustomer accounts for confirmation. Anaheim’s accounts receivable totaled $3,500,000 andcomprised 3,000 different customer accounts ranging in amount from $200 to $125,000.Based on the characteristics of the population and acceptable risk of incorrect acceptance,tolerable misstatement, and expected misstatement, Washburn determined a sample size of20 accounts.Required:a. Without making any calculations, briefly describe how Washburn would select a sampleof customer accounts from the population of accounts receivable.b. If Washburn selected a random starting point of 172,600, what are the first four dollarsthat would be selected? How would Washburn proceed to evaluate these items?c. What would Washburn do if two of the dollars selected are contained within the samecustomer account?d. Anaheim maintains its accounts receivable…
Thirty-five samples of size 7 each were taken from afertilizer-bag-filling machine at Panos Kouvelis Lifelong Lawn Ltd.The results were overall mean = 57.751b; average range = 1.78 1b.a) Determine the upper and lower control limits of the :X-chart, where u = 3.b) Determine the upper and lower control limits of the R-chart, where u = 3
Answering 8-25 and 8-25 all parts
Evaluating Results: Classical Variables Sampling. Kyle Berry is using mean-per-unit estimation in the audit of Leonard’s inventory balances. Leonard’s inventory is recorded at $240,000 and comprises 1,200 different items. Berry determined a sample size of 120 items and performed the appropriate substantive procedures. Based on this sample, he determined the following: Average audited value (per item) $204 Standard deviation of audited values $ 22 A summary of some additional parameters estimated by Berry follow: Tolerable misstatement $ 17,500 Expected misstatement $ 7,500 Risk of incorrect acceptance 5% Risk of incorrect rejection 10% Required:a. What is Berry’s estimate of the audited value of Leonard’s inventory?b. Calculate the precision and precision interval for Leonard’s inventory. Provide a briefdescription of the meaning of the precision interval.c. What is Berry’s conclusion with respect to Leonard’s inventory balance?d. Using a risk of incorrect…
. STATEMENT 1: Random sampling is a selection method that aims to eliminate bias in the selection process. STATEMENT 2: Assume that the auditor wants to examine 50 sales invoice (sample size) from a population of 2000 sales invoice, the sampling interval using haphazard selection is 40 (2,000/50). A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correct

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