JPitino Is Auditing the Revenue Cycle of Texas Boots and Has

question 6

Essay

J.Pitino is auditing the revenue cycle of Texas Boots and has elected to perform a nonstatistical test of controls.Texas Boots sells Snakeskin Boots to wholesale distributors around the country.Pitino does not expect more than 1% deviations to be present in the system.A tolerable rate of deviation would be 5%.Pitino has assessed control risk as medium low and selected a sample size of 40 sales and has defined a deviation as a recorded sale not being supported by a shipping document.
Required:
A.How does nonstatistical sampling differ from statistical sampling?
B.Why would Pitino choose to perform nonstatistical sampling instead of statistical sampling?
C.How should Pitino select the sample?
D.What conclusion should Pitino draw if one deviation is found?

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Definitions:

Reconstruction Years

The period after the Civil War, from 1865 to 1877, during which the United States worked to rebuild and integrate the Southern states.

1920s

A decade of economic prosperity and cultural dynamism in the Western world, particularly in the United States, known for the Jazz Age, the Harlem Renaissance, and significant social changes.

New

A term that denotes something recently created, discovered, or encountered.

Charles Lindbergh

An American aviator who made the first solo nonstop flight across the Atlantic Ocean in 1927, becoming an international hero.