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

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

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

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

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

Chapter8: Specialized Audit Tools: Attributes Sampling, Monetary Unit Sampling, And Data Analytics Tools

Section: Chapter Questions

Problem 33RQSC

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Question

Your assistant provides you with the information in the table below.

Number of purchases

6,000

Amount of purchases

$6,000,000

Sample size

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.

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