Auditing & Assurance Services 6th Edition by Timothy Louwers

Exercise 179

Sample Results Evaluation.
Required:
Review each of the following independent sets of conditions. For each condition, calculate the (1) sample rate of deviation, and use 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). What is your conclusion regarding the relationship of each of these factors to the upper limit rate of deviation based on comparing the upper limit rate of deviation across different combinations of these factors?
a. n = 60, d = 4, ROO = 5%.
b. n = 60, d = 6, ROO = 5%.
c. n = 60, d = 6, ROO = 10%.