Assignment Prompt & Instructions
[>Accounting homework help](https://www.sweetstudy.com/fields/business-finance-accounting)
– 2 years ago
**files (2)**
– ## W4Caseins.docx
– ## us-dfdtn-18-8-case-fuel-pro.pdf
**## W4Caseins.docx**
Instructions:
**Due by midnight on Sunday.**
3 pages APA format and scholarly sources
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.
**## us-dfdtn-18-8-case-fuel-pro.pdf**
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
Case 18-8
Fuel Pro
You are the experienced assistant auditor for Fuel Pro (the “Company”), whose audit is
subject to the standards of the AICPA. The company develops, manufactures, and
distributes fitness beverages. Your engagement team has identified risks of material
misstatement related to the existence, valuation and allocation, and rights and obligations
assertions of accounts receivable, specifically the risks of material misstatement that the
client has recorded in sales and accounts receivable for sales and shipments that are not
valid or are recorded at the incorrect amount.
Your field senior has assigned you to test the accounts receivable balance by sampling
and confirming balances with individual customers, which is a common audit test to
address these risks of material misstatement.
As part of your risk assessment procedures, you obtained an understanding of the
Company’s accounting policy, processes, and controls regarding the accounts receivable
balance by performing procedures (including inquiries of management and process
owners) and walkthroughs of the processes related to accounts receivable. As a result of
these procedures, you understand that the accounts receivables balance is relatively
homogeneous and consists of a high volume of low-dollar value transactions. You decide
to use data analytics to obtain fact-based evidence and to corroborate your understanding
of the accounts receivables balance. On the basis of your analysis, you identified one
statistical outlier of $2 million, while the remaining balance aggregated to $20 million,
which is made up of approximately 2,500 homogeneous transactions. Upon further
inquiries about the $2 million transaction, you determined that it is a related-party
transaction.
On the basis of your analysis of the accounts receivable balance, you define the customer
balance as the sampling unit. You determine that any balances greater than performance
materiality should be selected for testing and therefore select the $2 million related-party
transaction. You then determine that you would statistically sample the remaining
population.
The other relevant factors are as follows:
• Performance materiality is $1 million.
• Clearly trivial threshold is $70,000.
• The population size, excluding the $2 million selected balance, is $20 million (no
other items are above performance materiality).
• The level of risk is determined to be “higher.”
• You are not relying on the operating effectiveness of internal controls.
Case 21: Fuel Pro Page 2
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
• The client provided the accounts receivable population to you in electronic
format.
• Through the use of data analytics, you noted that the population had similar,
positive value characters.
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
from 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?
– Case 18-8 Fuel Pro
– Required:
**## us-dfdtn-18-8-case-fuel-pro.pdf**
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
Case 18-8
Fuel Pro
You are the experienced assistant auditor for Fuel Pro (the “Company”), whose audit is
subject to the standards of the AICPA. The company develops, manufactures, and
distributes fitness beverages. Your engagement team has identified risks of material
misstatement related to the existence, valuation and allocation, and rights and obligations
assertions of accounts receivable, specifically the risks of material misstatement that the
client has recorded in sales and accounts receivable for sales and shipments that are not
valid or are recorded at the incorrect amount.
Your field senior has assigned you to test the accounts receivable balance by sampling
and confirming balances with individual customers, which is a common audit test to
address these risks of material misstatement.
As part of your risk assessment procedures, you obtained an understanding of the
Company’s accounting policy, processes, and controls regarding the accounts receivable
balance by performing procedures (including inquiries of management and process
owners) and walkthroughs of the processes related to accounts receivable. As a result of
these procedures, you understand that the accounts receivables balance is relatively
homogeneous and consists of a high volume of low-dollar value transactions. You decide
to use data analytics to obtain fact-based evidence and to corroborate your understanding
of the accounts receivables balance. On the basis of your analysis, you identified one
statistical outlier of $2 million, while the remaining balance aggregated to $20 million,
which is made up of approximately 2,500 homogeneous transactions. Upon further
inquiries about the $2 million transaction, you determined that it is a related-party
transaction.
On the basis of your analysis of the accounts receivable balance, you define the customer
balance as the sampling unit. You determine that any balances greater than performance
materiality should be selected for testing and therefore select the $2 million related-party
transaction. You then determine that you would statistically sample the remaining
population.
The other relevant factors are as follows:
• Performance materiality is $1 million.
• Clearly trivial threshold is $70,000.
• The population size, excluding the $2 million selected balance, is $20 million (no
other items are above performance materiality).
• The level of risk is determined to be “higher.”
• You are not relying on the operating effectiveness of internal controls.
Case 21: Fuel Pro Page 2
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
• The client provided the accounts receivable population to you in electronic
format.
• Through the use of data analytics, you noted that the population had similar,
positive value characters.
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
from 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?
– Case 18-8 Fuel Pro
– Required:
**## W4Caseins.docx**
Instructions:
**Due by midnight on Sunday.**
3 pages APA format and scholarly sources
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.
**## us-dfdtn-18-8-case-fuel-pro.pdf**
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
Case 18-8
Fuel Pro
You are the experienced assistant auditor for Fuel Pro (the “Company”), whose audit is
subject to the standards of the AICPA. The company develops, manufactures, and
distributes fitness beverages. Your engagement team has identified risks of material
misstatement related to the existence, valuation and allocation, and rights and obligations
assertions of accounts receivable, specifically the risks of material misstatement that the
client has recorded in sales and accounts receivable for sales and shipments that are not
valid or are recorded at the incorrect amount.
Your field senior has assigned you to test the accounts receivable balance by sampling
and confirming balances with individual customers, which is a common audit test to
address these risks of material misstatement.
As part of your risk assessment procedures, you obtained an understanding of the
Company’s accounting policy, processes, and controls regarding the accounts receivable
balance by performing procedures (including inquiries of management and process
owners) and walkthroughs of the processes related to accounts receivable. As a result of
these procedures, you understand that the accounts receivables balance is relatively
homogeneous and consists of a high volume of low-dollar value transactions. You decide
to use data analytics to obtain fact-based evidence and to corroborate your understanding
of the accounts receivables balance. On the basis of your analysis, you identified one
statistical outlier of $2 million, while the remaining balance aggregated to $20 million,
which is made up of approximately 2,500 homogeneous transactions. Upon further
inquiries about the $2 million transaction, you determined that it is a related-party
transaction.
On the basis of your analysis of the accounts receivable balance, you define the customer
balance as the sampling unit. You determine that any balances greater than performance
materiality should be selected for testing and therefore select the $2 million related-party
transaction. You then determine that you would statistically sample the remaining
population.
The other relevant factors are as follows:
• Performance materiality is $1 million.
• Clearly trivial threshold is $70,000.
• The population size, excluding the $2 million selected balance, is $20 million (no
other items are above performance materiality).
• The level of risk is determined to be “higher.”
• You are not relying on the operating effectiveness of internal controls.
Case 21: Fuel Pro Page 2
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
• The client provided the accounts receivable population to you in electronic
format.
• Through the use of data analytics, you noted that the population had similar,
positive value characters.
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
from 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?
– Case 18-8 Fuel Pro
– Required:
**## W4Caseins.docx**
Instructions:
**Due by midnight on Sunday.**
3 pages APA format and scholarly sources
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.
**## us-dfdtn-18-8-case-fuel-pro.pdf**
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
Case 18-8
Fuel Pro
You are the experienced assistant auditor for Fuel Pro (the “Company”), whose audit is
subject to the standards of the AICPA. The company develops, manufactures, and
distributes fitness beverages. Your engagement team has identified risks of material
misstatement related to the existence, valuation and allocation, and rights and obligations
assertions of accounts receivable, specifically the risks of material misstatement that the
client has recorded in sales and accounts receivable for sales and shipments that are not
valid or are recorded at the incorrect amount.
Your field senior has assigned you to test the accounts receivable balance by sampling
and confirming balances with individual customers, which is a common audit test to
address these risks of material misstatement.
As part of your risk assessment procedures, you obtained an understanding of the
Company’s accounting policy, processes, and controls regarding the accounts receivable
balance by performing procedures (including inquiries of management and process
owners) and walkthroughs of the processes related to accounts receivable. As a result of
these procedures, you understand that the accounts receivables balance is relatively
homogeneous and consists of a high volume of low-dollar value transactions. You decide
to use data analytics to obtain fact-based evidence and to corroborate your understanding
of the accounts receivables balance. On the basis of your analysis, you identified one
statistical outlier of $2 million, while the remaining balance aggregated to $20 million,
which is made up of approximately 2,500 homogeneous transactions. Upon further
inquiries about the $2 million transaction, you determined that it is a related-party
transaction.
On the basis of your analysis of the accounts receivable balance, you define the customer
balance as the sampling unit. You determine that any balances greater than performance
materiality should be selected for testing and therefore select the $2 million related-party
transaction. You then determine that you would statistically sample the remaining
population.
The other relevant factors are as follows:
• Performance materiality is $1 million.
• Clearly trivial threshold is $70,000.
• The population size, excluding the $2 million selected balance, is $20 million (no
other items are above performance materiality).
• The level of risk is determined to be “higher.”
• You are not relying on the operating effectiveness of internal controls.
Case 21: Fuel Pro Page 2
Copyright 2020 Deloitte Development LLC
All Rights Reserved.
• The client provided the accounts receivable population to you in electronic
format.
• Through the use of data analytics, you noted that the population had similar,
positive value characters.
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
from 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?
– Case 18-8 Fuel Pro
– Required: