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Review each of the following independent sets of conditions. For each condition, calculate the (1) sample rate of deviation, and use the AICPA sample evaluation tables to identify the (2) upper limit rate of deviation, and (3) allowance for sampling risk (n = sample size, d = deviations. ROO = risk of overreliance). (Round your answers to 1 decimal place.)

a. n = 100. d = 8. ROO = 5%.
b. n = 100. d = 4. ROO = 5%.
c. n = 100. d = 8. ROO = 10%.

Respuesta :

Answer: See explanation

Explanation:

a. n = 100. d = 8. ROO = 5%.

i. Sample rate of deviation will be:

= Number of Deviations / Sample size

= 8/100

= 8%

ii. Upper limit rate of deviation = 14%

iii. Allowance for sampling risk will be:

= Upper Limit Rate of Deviation - Sample rate of devaition

= 14% - 8%

= 6%

b. n = 100. d = 4. ROO = 5%.

i. Sample rate of deviation will be:

= Number of Deviations / Sample size

= 4/100

= 4%

ii. Upper limit rate of deviation = 9%

iii. Allowance for sampling risk will be:

= Upper Limit Rate of Deviation - Sample rate of devaition

= 9% - 4%

= 5%

c. n = 100. d = 8. ROO = 10%.

i. Sample rate of deviation will be:

= Number of Deviations / Sample size

= 8/100

= 8%

ii. Upper limit rate of deviation = 12.7%

iii. Allowance for sampling risk will be:

= Upper Limit Rate of Deviation - Sample rate of devaition

= 12.7% - 8%

= 4.7%

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