Assignment No 2

Report on Sample Payments

Name: Pranav Manik Dhale

Reg. No: WRO0626971

E-mail: dhalepranav1999@gmail.com

Phone: 9561181802
Planning Sample with Confidence Level of 80%:

Conclusion:

As we have selected the plan sampling with 80% Level of Confidence and
200 as Sample size, the result shows that if number more than 3 deviation are
observed in sample size of 10 you can be at least 80% confident that population
deviation rate is not more than 50%.
Planning of Beta and Alpha Risk Control:

Conclusion:

If no more than 0 deviations are observed in a sample size of 1, you can be

at least 60% confident that the population deviation rate is not more than 80%. If
population deviation is 30% or smaller you can be at least 40% confident that you
will not observe more than 0 deviations in the sample.
Planning with Sample Evaluation:

Conclusion:

For an observed number of 10 deviation in sample of 100 you can be 80%

confident that the population deviation rate is no more than 12.00%. Means you
can be 80% confident that the population deviation is between 7.50% and 13.50%.
Auditing with various options and tools available in IDEA for various test
required to test frauds inconsistency and irregularity.

1. Duplication of Sample Payment:

A) On Invoice basis:
 B) On Cheque basis:

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 the Sample Payment we have identified that 10 invoice and 2 Cheques are
duplicate. We can do the external confirmation of this duplicated invoice and
cheque from vendor and Bank.
2. Stratification of Sample Payment

A) On the basis of amount at increment of 5,000:

B) On the basis of amount, at increment of 10,000:
 C) On the basis of amount at increment of 20,000:

Conclusion:

Stratification Sampling helps in determining the high and low cut off values for
testing exceptional items. In the Sample Payment based on the amount observed
that there is no change identified in increment of 10,000 and 20,000 in upper limit
of exception out of 900 records.
 3) Monetary Unit Sampling:

Conclusion:

In Monetary Unit Sampling with confidence level at 90% we can accept the
population when no more than 1.400000 total tainting’s are observed in a sample
size of 14 with the Sampling interval of 268135.97. This is the minimum sample
size that will allow you to draw the above conclusion.
 D) Field Statistics:

Conclusion:

In the field Statistics we can observe that in the month of January is the Most
Common Month in which the invoices have been issued and the payment for such
invoices is due in February, using this information we can verify whether the
amount is paid before the due date or not and whether appropriate amount is paid
or not. It is observed that most common date for payment is Monday which means
most of the payment are made on Mondays so we can use that for analysis
accordingly.
Consolidated Report:

In the Sample Payment we have applied sampling plan with confidence level
and duplication of invoice, stratification sampling based on Amount with the
different level of interval. With the help of field statistics we can evaluate the most
common month and day of payment.

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 payment 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 Payment we can use the Duplication Function for finding out whether
there is any fictitious invoice is made for the same party or vendor. While choosing
the options we firstly go with monetary sampling because it helps in preparing base
for an audit.