What factors should be considered when determining the sample size for tests of details — in this instance the accounts receivable balance?
Using current literature, complete “Case 18-8, Fuel Pro” that is attached. Here are the specific questions that need to be answered:
Required:
1. What factors should be considered when determining the sample size for tests of details — in this instance the accounts receivable balance?
You select 30 accounts receivable customer balances based on the sample size that has been determined in accordance with your Firm’s sampling tables. Using the appropriate sampling method, determine the customer balances to be selected.
2. What factors should be considered when determining the sampling method (e.g., random, monetary unit sample)?
3. Using the facts in this case study, give examples of sampling methods and their relevant characteristics and determine the most appropriate statistical sampling method to use.
You send a total of 31 confirmations: 30 confirmations as determined by the sampling table and 1 that was judgmentally selected because it was greater than performance materiality. A selection of the confirmation results for Fuel Pro is shown below.
Confirmation Number
Customer Name
Recorded Balance
Amount Confirmed by Customer
Evaluation of Results
1
Representative Corporation
$5,000
Confirmation reply not received by customer
2
Illustration LLC
$8,000
$8,000
3
Selection Partnership
$10,000
$9,800
4
Specimen, Inc. (a related party)
$2,000,000
$2,000,000
4. On the basis of the accounts receivable confirmation results received (as presented above), what are the conclusions for each of the sample items selected?
5. Should any errors be extrapolated over the entire population given that the only identified error relates to Confirmation 3
6. What are the ethical issues that need to be considered? (this question is in addition to the ones at the end of the case)
Use the Case Study Guidelines under the “Getting Started” tab as a guide on writing this. Your paper should be a minimum of 3 pages (not including the cover sheet and references) and follow APA guidelines.
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