Assignment No 1

Report on Audit of Sample: Detail Sales using IDEA Tools.

Name: Pranav Manik Dhale

Reg. No: WRO0626971

E-mail: dhalepranav1999@gmail.com

Phone: 9561181802
Planning Sample with Confidence Level of 70% using Attributable Sampling:

 Beta Risk Control

Conclusion:
With the help of Planning (beta risk control) we concluded that no more than
6 deviations observed in a size of 19. We can be 70% confident that population
deviation rate is not more than 40%.
  Beta and Alpha Risk Control

Conclusion:
Audit with Attribute Sampling with keeping in mind the risk of alpha and
beta resulted that if no more than 2 deviations are observed in a sample size of 6.
We can be at least 70% confident that the population deviation rate is not more
than 60%.
If the population deviation rate is 40% or smaller, you can be at least 50%
confident that you will not observe not more than 2 deviation in the sample.
  Sample Evaluation at 80% Confidence Level

Conclusion:

For an observed number of 5 deviations in a sample size of 100 we can be

80% confident that the population deviation rate is no more than 7%.

Alternatively, you can be 80% confident that population deviation rate is between
3% and 8.33%.
Auditing with various options and tools available in IDEA for various test
required to test frauds inconsistency and irregularity.

1) Stratification of Sample: Detailed Sales

A) On the basis of sales before tax at increment of 5,000:

B) On the basis of sales before tax at increment of 10,000:
C) On the basis of sales before tax at increment of 20,000:
D) On the basis of sales before tax at increment of 25,000:

Conclusion:
Stratification totals the amount and values of records within specified bands.
In the above case we take the limit for stratification of 10000, 20000, and 25000 of
amount of sales before tax.
 2) Monetary Unit Sampling:

Conclusion:
Monetary Unit Sampling is very useful tool in IDEA. This tool helps an
auditor to select appropriate units to find out error and expected deviation. In the
above scenario we select quantity as database field for that by default the
confidence level is 90%. Tolerable value is set at 30% and expected error at 10%.
With the help of Monetary unit sampling we may accept the population at 90%
confidence level where no more than 1.400000 total tainting’s are observed in a
sample size of 14.
 3) Field Statistics:

Conclusion:
We concluded with the field statistics that in the month of July the sale
transactions has been done more than others, same like on the day of Monday. So
while doing audit we should focus on the specified Day and Month. We should
focus on day and month whether the Monday or July carries misstated transactions.
 4) Duplication of Sample: Detailed Sale

Conclusion:
Duplication helps us to search through large volume of data and help pin-
point specific duplicate entries or specific missing entries. With the help of
duplication we can assure on all data reviewed by it.
In above scenario we can observe that invoice no 1000097, 1000109, 1000118,
1000140, 1000320, and 1000350 have occurred twice each i.e. they have been
duplicated.
Consolidated Report:
IDEA uses various tools and techniques for audit purpose. We have selected
some of the tools such as Attributable Sampling, Stratification, Duplication Key,
Field Statistics and Monetary Unit sampling.

In the Sample, Detailed Sales we have applied sampling plan with confidence level
and duplication of invoice, stratification sampling based on Sales before tax with
the different level of interval. With the help of field statistics we can evaluate the
most common month and day of sale.
Depending upon the above various method applied as we can use the duplication,
field statistics function for the best and appropriate audit with detail evaluation
which helps in finding out the highest sale made.

As an auditor first we can stratify the sample size with various option (i.e. unit
price, invoice) depending upon the circumstance of audit. It will help us to do the
audit at reasonable interval in less time and in an effective manner. In the Sample,
detailed sales we can use the Duplication Function for finding out whether there is
any fictitious invoice is made for the same party or purchaser. While choosing the
options we firstly go with monetary sampling because it helps in preparing base for
an audit.