15-20
15–34 (continued)
INVOICE
NUMBER
EXCEPTION ANALYSIS
6810
Confirm the account balances to the customers; examine the
reduction in the perpetual inventory records.
7625
Trace the amount to the sales journal and accounts receivable
master file; examine the shipping document and recompute
the sale amount.
8431
Determine who recorded the invoice and check several others
prepared by him or her to determine if the problem consistently
occurs.
8528
Examine the accounts receivable master file for subsequent
cash receipt; examine sales invoices for other invoices to the
same customer to determine if customer orders were attached.
8566
Check the price on other invoices to the same customer. Check
the price on other invoices that have the same product.
8780
See 7625
9169
Check credit history of customer and evaluate collectibility of the
customer’s account.
9974
Recheck actual price, extensions, and postings; determine who
the clerk was and check several other invoices for proper
indication of performance.
15–35 a.
ATTRIBUTE
MISSING ELEMENT
1
CUER is 9.2%
2
Initial sample size is 77
3
Tolerable exception rate is 7%
4
The actual number of exceptions in the sample was 1
5
ARO is 5%
6
Sample size is 70
c. Attribute 1 has a lower ARO, which normally would lead to a large
sample size. TER–EPER is 6% for both attribute 1 and attribute 3.
15-21
15–35 (continued)
for attribute 1.
d. The CUER is smaller for attribute 2 relative to attribute 5 because
Case
15–36 a. Audit sampling could be conveniently used for procedures 3 and 4
b. The most appropriate sampling unit for conducting most of the
audit sampling tests is the shipping document because most of
the tests are related to procedure 4. Following the instructions of
the audit program, however, the auditor would use sales journal
c. Note: The sampling data sheet that follows assumes an attributes
sampling approach. The only difference between the sampling
data sheet for attributes sampling and for nonstatistical sampling
sampling.
DESCRIPTION
OF ATTRIBUTES
TER
ARO
INITIAL
SAMPLE
SIZE*
A duplicate sales invoice exists for
the shipping document selected.
5.0
10
77
Shipping document agrees with
related duplicate sales invoice.
4.0
10
57
15-22
15–36 (continued)
DESCRIPTION
OF ATTRIBUTES
TER
ARO
INITIAL
SAMPLE
SIZE*
The duplicate sales invoice has
attached a copy of the shipping
document, shipping order, and
customer order.
5.0
10
77
The shipping order has proper
credit approval.
5.0
10
77
The duplicate sales invoice has
internal verification of
computations.
5.0
10
77
The duplicate sales invoice has the
same price and quantity as
approved price list and shipping
document.
4.0
10
57
Customer name, amount and date
agrees between duplicate sales
invoice and sales journal and
subsidiary ledger.
4.0
10
57
* assumes the shipping document is the sampling unit.
■ Integrated Case Application
Filename P1537.xls)
a.
and
d. PINNACLE MANUFACTURING―PART VI
Client: Pinnacle Manufacturing
― Acquisitions.
Define the Objective(s): Examine vendors’ invoices, receiving
reports, purchase orders, and other related documents to
15–37 (continued)
Vouchers from 1/1/2016 to 10/31/2016. First voucher number –
6734. Last voucher number – 33722.
Define the sampling unit, organization of population items,
and random selection procedures: Voucher number, recorded
electronic spreadsheet.
Description of Attributes
Planned Audit
Actual Results
EPER
TER
ARO
Initial
Sample
Size
Sample
Size
Number
of
Exceptions
SER
Calculated
Sampling
Error
(TER–SER)
1. Evidence of internal
verification of voucher
package including propriety
of purchase, dates, unit
costs, prices, extensions,
footings, account classification,
recording in journal, and
posting and summarization.
(6a, b)
0
6%
10%
30
30
2
6.7%
–.7% (note
SER
exceeds
TER)
2. Prices on vendors’ invoices
conform to approved price
limits established by
management. (6c)
0
5%
10%
40
40
0
0
5%
3. Price times quantity and
other calculations on the
vendor’s invoice are correct.
(6d)
1%
5%
10%
50
50
0
0
5%
4. Evidence of proper account
classification on vendors’
invoices. (6e)
2%
5%
10%
70
70
0
0
5%
5. Dates on entries in purchases
journal agree with dates on
receiving reports. (6f)
1%
5%
10%
50
50
2
4%
1%
6. Evidence of internal
verification of each purchase
voucher. (6g)
0
6%
10%
30
30
0
0%
6%
2. There was an error discovered where there was no attribute. This happens in practice, too. The
auditor should not ignore the exception even though it is an unplanned discovery.
15–37 (continued)
b. Client: Pinnacle Manufacturing
― Cash Disbursements
Define the Objective(s): Examine cancelled checks and other
– 12376. Last check number – 37318.
Define the sampling unit, organization of population items,
and random selection procedures: Check number, recorded
Description
of Attributes
Planned Audit
Actual Results
EPER
TER
ARO
Initial
Sample
Size
Sample
Size
Number
of
Exceptions
SER
Calculated
Sampling
Error
(TER–SER)
1. Payee, name,
amount, and date
on cancelled
check agrees with
related purchases
journal and cash
disbursements
entry. (9a)
0
5%
10%
40
2. Evidence of
signature, proper
endorsement and
cancellation of
each check. (9b)
0
5%
10%
40
3. Date on cancelled
check agrees with
bank cancellation
date. (9c)
2
5%
10%
70
4. Cash discounts
are correct. (9d)
0
5%
10%
40
15-25
15–37 (continued)
c. Population = voucher numbers 6734 to 33722
Sample size = 50
Random Selection:
=RANDBETWEEN(6734, 33722)
The command for selecting the random number can be entered
directly onto the spreadsheet, or can be selected from the function
menu (math & trig) functions under the “insert” menu. It may
solution.
15–38 ACL Problem
the bottom of the screen.
b. The sample size is 39 and the sampling interval is 104 (rounded
down from 104.66).
the sample size decreases to 29.
(Note: answers to part b. and c. are similar to answers obtained
15-26
15–38 (continued)
Invoice Number
Sales Order Number
Customer
Number
Invoice Date
Invoice
Amount
173640036997
000008176082
0252432
2/10/2014
29144.36
173640037166
000008176251
0258424
3/9/2014
11167.69
173640037196
000008176281
0261014
3/12/2014
3723.44
173640037226
000008176311
0260835
3/22/2014
21582.56
173640037472
000008176558
0263402
4/15/2014
5009.58
173640037506
000008176592
0255268
4/16/2014
11707.48
173640037545
000008176631
0255998
4/28/2014
19450.53
173640037782
000008176869
0257490
5/11/2014
23638.49
173640037800
000008176887
0257884
5/11/2014
4639.11
173640037808
000008176895
0235520
5/17/2014
1595.31
173640037891
000008176978
0260600
5/20/2014
945.32
173640037931
000008177018
0245068
5/21/2014
27755.91
173640037940
000008177027
0262176
5/26/2014
19244.99
173640038114
000008177201
0257847
6/1/2014
7401.07
173640038204
000008177291
0240643
6/16/2014
15132.12
173640038292
000008177379
0249233
6/16/2014
15728.09
173640038449
000008177536
0244063
6/29/2014
22261.59
173640038458
000008177545
0241913
6/24/2014
6188.54
173640038611
000008177698
0239939
6/29/2014
4170.89
173640038717
000008177804
0256692
7/13/2014
15043.24
173640038905
000008177992
0240304
7/8/2014
9413.12
173640039091
000008178178
0250396
7/22/2014
3210.42
173640039277
000008178364
0239614
7/30/2014
2745.13
173640039343
000008178430
0244488
8/10/2014
20998.44
173640039430
000008178517
0234834
8/20/2014
15128.39
173640039457
000008178544
0251543
8/20/2014
3238.49
173640039487
000008178574
0252534
8/10/2014
768.13
173640039502
000008178589
0244430
8/16/2014
7268.08
173640039589
000008178677
0253965
8/27/2014
1276.47
173640039617
000008178705
0260685
8/27/2014
17376.00
173640039969
000008179057
0244080
9/23/2014
2010.65
173640040032
000008179121
0242752
9/20/2014
13466.11
173640040150
000008179239
0260166
9/30/2014
15636.04
173640040214
000008179303
0248413
9/30/2014
1137.00
173640040565
000008179655
0256038
10/21/2014
1538.06
173640040583
000008179673
0247128
10/29/2014
16293.16
173640040585
000008179675
0263951
10/29/2014
19807.72
173640040697
000008179787
0237042
11/16/2014
2967.13
173640040739
000008179829
0250143
11/25/2014
5182.95
15-27
15–38 (continued)
e. The largest invoice amount included in the sample above is
$29,144.36 (invoice number 173640036997). Since record
sampling was used, the invoice amount is not considered.
limit of 6%