Auditing

15-27

a. All audit procedures can use attributes sampling except audit procedures 1 and 3. Procedure 1 involves recalculation of just one month’s sales journal. The auditor would judgmentally select the month to test. Procedure 3 involves the performance of an analytical procedure for which the auditor is doing a 100% review of the entire sales journal.

b. The appropriate sampling unit for audit procedures 2, and 4-6 is a sales invoice number, date, or item in the sales journal. The primary objective in the test is the occurrence and accuracy objectives.

c.

AUDIT PROCEDURE | ATTRIBUTE |

2 | Entries in the sales journal have been shipped as evidence by the existence of a related shipping document. |

4 | Prices used to calculate the sales amount on the invoice reconcile with those on the approved price list. |

5 | The date that credit approval is documented on the sales order precedes the date on the shipping document. |

6 | The calculation of the sales amount on the sales invoice is accurate. |

d.

AUDIT

PROCEDURE | TEST OF CONTROL OR SUBSTANTIVE TEST OF TRANSACTIONS | SAMPLE SIZE | SAMPLE SIZE |

| | ARACR | TER | EPER | |

2 | Substantive test of transaction | 5% | 5% | 0.5% | 93 |

4 | Test of control | 5% | 7% | 1.5% | 66 |

5 | Test of control | 5% | 7% | 1.5% | 66 |

6 | Substantive test of transaction | 5% | 5% | 0.5% | 93 |

15-30

a. SAMPLE SIZE EXPLANATION

1. 90 Given

2. > Column 1 Decrease in ARACR

3. > Column 2 Decrease in TER

4. > Column 1 Decrease in ARACR

5. < Column 1 Increase in TER-EPER

6. < Column 5 Decrease in EPER

7. > Columns...