ACCT435-1202B-01 Auditing Assignment Name: Unit 4 Group Project

ACCT435-1202B-01 Auditing

Assignment Name:

Unit 4 Group Project

Deliverable Length:

1–2 pages; 7–10 PowerPoint slides

Details:

You are the auditor for a company and need to review the company’s accounts receivable using probability proportional to size (PPS) sampling. In addition, the board of directors has requested that you and your team present an explanation of your PPS process at its next monthly meeting.

Individual Portion:

Use the following company data and the PPS Sampling Tables 1 & 2:

• The recorded book value of these accounts is $3,460,000.
• The company has a tolerable error of $63,460.
• The anticipated error is $13,000.
• The risk of incorrect acceptance is 5%.
• The acceptable number of overstatements of misstatements is 2.

Use probability proportional to size (PPS) sampling to do the following:

1. Determine the reliability factor.
2. Determine the correct expansion factor.
3. Determine the sample size you should use.
4. Determine the sampling interval you should use.

Please add your file.

Group Portion:

With your team of analysts, create a PowerPoint presentation of 7–10 slides to explain the following to the board of directors:

1. The objective of using probability proportional to size sampling (PPS) to test account balances
2. Specifically, how you used PPS to test this company's account balances
3. The purpose of the sample size and the sampling interval

Please add your file.

The following rubric will be used for grading:

Objective:

 Assess and explain the risks associated with all sampling procedures and how to use probability proportional to size sampling to test account balances.