Question: In the audit of ABC Company, the auditor specifies 8 attributes of interest. The statistical parameters for each condition and the number of deviations found in the sample are as follows:
| Attribute |
Tolerable deviation rate (%) |
Risk of assessing control risk too low |
Expected population deviation rate (%) |
Number of sample deviations |
| 1 |
4 |
5 |
1.5 |
1 |
| 2 |
3 |
5 |
0.5 |
0 |
| 3 |
6 |
5 |
2.0 |
4 |
| 4 |
6 |
5 |
2.5 |
5 |
| 5 |
8 |
5 |
3.0 |
2 |
| 6 |
3 |
10 |
1.0 |
0 |
| 7 |
4 |
10 |
1.5 |
2 |
| 8 |
5 |
10 |
2.0 |
4 |
Required: (a) Assuming a large population, determine the sample size for each attribute.
(b) Rounding sample size down to the nearest whole number, determine the upper deviation limit for each attribute.
(c) Determine the allowance for sampling risk for each attribute.
(d) Identify the controls that support and that do not support the auditor's planned control risk.