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Auditing and Assurance Services 9th Edition by Alvin Arens,Mark Beasley,Randy Elder
Edition 9ISBN: 978-0130459206Auditing and Assurance Services 9th Edition by Alvin Arens,Mark Beasley,Randy Elder
Edition 9ISBN: 978-0130459206 Exercise 8
Doug Iceberge, senior-in-charge of the audit of Fisher Industries, has decided to test the following two controls for Fisher's revenue process.
1. All sales invoices are supported by proper documentation, that is, a sales order and a shipping document.
2. All sales invoices are mathematically correct. Iceberge has decided to use a nonstatistical sampling approach based on the following judgments for each control and has judgmentally decided to use a sample size of 50 sales invoice packets.
After completing the examination of the 50 sample items, Iceberge noted one deviation for control 1 and two deviations for control 2.
Required:
What should Iceberge conclude about each control? Justify your answer.
1. All sales invoices are supported by proper documentation, that is, a sales order and a shipping document.
2. All sales invoices are mathematically correct. Iceberge has decided to use a nonstatistical sampling approach based on the following judgments for each control and has judgmentally decided to use a sample size of 50 sales invoice packets.
After completing the examination of the 50 sample items, Iceberge noted one deviation for control 1 and two deviations for control 2.
Required:
What should Iceberge conclude about each control? Justify your answer.
Explanation
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Control
Control is the process of mitig...
Auditing and Assurance Services 9th Edition by Alvin Arens,Mark Beasley,Randy Elder
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