Auditing and Assurance Services, Student Value Edition (16th Edition)
16th Edition
ISBN: 9780134075754
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Question
Chapter 15, Problem 4RQ
To determine
Explain the meaning of block sample selection and how an auditor can obtain five blocks of 20 sales invoices from a sales journal.
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Students have asked these similar questions
Which of the following audit procedures uses “a purchase transaction” as the sampling unit?
A.
Trace customer orders to the purchase journal.
B.
Trace purchase transactions from the purchase journal to the customer orders.
C.
All of the options use “a purchase transaction” as the sampling unit.
D.
Trace receiving reports to the purchase journal.
E.
Examine purchase orders for evidence of the manager’s approval.
Get the "Audit" Data file (attached).
Follow the instructions under “using excel to construct a frequency distribution” in Chapter 2 of textbook.
Develop Figure 2.10 and add relative frequency and cumulative frequency. Keep in mind that “count of audit time” is frequency only.
Upload the final figure showing classes, frequency (count of audit time), relative frequency, and cumulative frequency.
This problem requires the use of ACL software, which is includedin the CD attached to the text. Information about installing and using ACL and solvingthis problem can be found in Appendix, pages 830–834. You should read all of thereference material, especially the material on sampling, to answer questions a. through e.For this problem use the “Inventory” file in the “Inventory_Review” subfolder undertables in Sample_Project. Suggested commands, where applicable, are indicated at the endof the problem requirements.a. Calculate the sample size and sampling interval for an MUS sample based on inventory value at cost (Value). Use a confidence level of 90%, materiality of $40,000,and expected errors of $2,500. (Sampling/Calculate Sample Size; select “monetary”radio button)b. What is the sampling size and sampling interval if you increase materiality to$50,000 and decrease expected errors to $1,000?c. Select the sample based on the sampling interval determined in part a. (Sampling /Sample…
Chapter 15 Solutions
Auditing and Assurance Services, Student Value Edition (16th Edition)
Ch. 15 - Prob. 1RQCh. 15 - Prob. 2RQCh. 15 - Prob. 3RQCh. 15 - Prob. 4RQCh. 15 - Prob. 5RQCh. 15 - Prob. 6RQCh. 15 - Prob. 7RQCh. 15 - Prob. 8RQCh. 15 - Prob. 9RQCh. 15 - Prob. 10RQ
Ch. 15 - Prob. 11RQCh. 15 - Prob. 12RQCh. 15 - Prob. 13RQCh. 15 - Distinguish between the TER and the CUER. How is...Ch. 15 - Prob. 15RQCh. 15 - Prob. 16RQCh. 15 - Prob. 17RQCh. 15 - Prob. 18RQCh. 15 - Prob. 19RQCh. 15 - Prob. 20RQCh. 15 - Prob. 21RQCh. 15 - Prob. 22.1MCQCh. 15 - Prob. 22.2MCQCh. 15 - Prob. 22.3MCQCh. 15 - Prob. 23.1MCQCh. 15 - Prob. 23.2MCQCh. 15 - Prob. 23.3MCQCh. 15 - Prob. 24.1MCQCh. 15 - Prob. 24.2MCQCh. 15 - Prob. 24.3MCQCh. 15 - Prob. 25.1MCQCh. 15 - Prob. 25.2MCQCh. 15 - Prob. 25.3MCQCh. 15 - Prob. 27DQPCh. 15 - Lenter Supply Company is a medium-sized...Ch. 15 - Prob. 29DQPCh. 15 - Prob. 30DQPCh. 15 - Prob. 31DQPCh. 15 - Prob. 32DQPCh. 15 - Prob. 33DQPCh. 15 - Prob. 34DQPCh. 15 - Prob. 35DQPCh. 15 - Prob. 36CCh. 15 - Prob. 37ICA
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Similar questions
- he auditor of Kent Ltd selects a sample from the file of shipping documents in order to confirm that all sales shipped are invoiced and recorded in accounting records. This test will confirm:Select one:a. Valuation and allocation assertion for sales.b. Cut-off assertion for sales.c. Occurrence assertion for sales.d. Completeness assertion for sales.arrow_forwardof stion For a sample of sales transactions selected from the sales journal, verify that the amount of the transaction has been recorded in the correct customer account in the accounts receivable subledger. Choose the Audit Objective: Choose the specific audit objective →arrow_forwardBriefly identify and explain the four methods used to select sample items.arrow_forward
- Computer-assisted audit techniques (CAATs) can be used to audit inventory. Describe FOUR (4) audit procedures on which this technique can be used.arrow_forwardAs part of your annual audit plan, you will be conducting an audit of the Purchases-Payables cycle. And to effectively plan for the audit, you have to document your understanding of the said process using a flowchart. This is also part of your usual planning procedures which will be expected from you by your Audit Manager. As a result of your interviews, observations, understanding of the process’ policies and procedures; you were able to gather the following data: The requests to purchase materials or the Purchase Requisition (PR) are prepared by the Purchasing department which is confirmed by the inventory controllers. These are approved by authorized personnel based on the company’s Approval Matrix. After confirmation of the PR, Purchasing Department will prepare the Purchase Orders (PO). These POs do not undergo further approval as long as supported by approved by PRs. A copy of the PO is sent to the vendor and another copy of the same PO to the Receiving personnel. Another copy…arrow_forwardAs part of your annual audit plan, you will be conducting an audit of the Purchases-Payables cycle. And to effectively plan for the audit, you have to document your understanding of the said process using a flowchart. This is also part of your usual planning procedures which will be expected from you by your Audit Manager. As a result of your interviews, observations, understanding of the process’ policies and procedures; you were able to gather the following data: The requests to purchase materials or the Purchase Requisition (PR) are prepared by the Purchasing department which is confirmed by the inventory controllers. These are approved by authorized personnel based on the company’s Approval Matrix. After confirmation of the PR, Purchasing Department will prepare the Purchase Orders (PO). These POs do not undergo further approval as long as supported by approved by PRs. A copy of the PO is sent to the vendor and another copy of the same PO to the Receiving personnel. Another copy…arrow_forward
- In order to determine whether accounts payable are understated, auditors wish to obtain a sample of purchase transactions from suppliers and how they were recorded in the accounting books. � , sampling is the best mechanism to obtain this type of samples. a . discovery b . attributes c . random digits d . variablesarrow_forwardWhich assertion is most likely being tested when an auditor vouches transactions from the sales Journal to the sales orders? a. cutoff b. rights c. completeness d. accuracyarrow_forwardInput validation includes field interrogation that examines the data in individual fields. List four validation tests and indicate what is checked in each. Please give specific examples for each one of them.arrow_forward
- Evaluate alternative methods of sampling used in the process of gathering data to support desicion making within an organisation like Applearrow_forwardCollecting data from all members of a given population is called: a. Audit b. Poll c. Sampling d. Censusarrow_forwardAssume that you have selected a random sample of 15 checks from a population of 800 checks. The checks you have selected are the following numbers: 664, 789, 650, 136, 365, 538, 800, 657, 110, 136, 398, 645, 214, 544, and 777. Based on this sample, evaluate the truth of the following statements regarding your findings. Describe why you feel each statement is true or false. a. You have determined that Check No. 365 was not properly signed and was paid to a fictitious vendor. You conclude that fraud exists in the population. b. You have determined that no fraud exists in the sample of 15 checks you evaluated. You conclude that no fraud exists in the population.arrow_forward
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