Posted: October 11th, 2022

Why or why not?

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Porter Gale Corporation is a publicly-traded company. You are completing an audit at their headquarters and will conduct a test of controls over revenue recognition using attributes sampling. You will use the results as part of the evidence on which to base your opinion on internal controls and to determine what substantive auditing procedures you should perform on revenue and accounts receivable. Your test of controls involves the following:
Set the risk of overreliance at 5% Tolerable deviation rate at 5% Expected deviation rate at 1%
You plan to use a sample size of 100. (Note that this sample size is just rounded up from the sample size of 93 that would have been obtained from the appropriate table). The results of your testing are attached in the word doc.
Required: Create a table (in Excel, in a format like the table shown in your assignment) with an analysis of your audit and include a response for each question below. Column labels are included below:
A. Control (given in the problem) B. Results (given in the problem) C. Upper Limit Deviation: Determine the upper limit of deviation for each of the controls. D. Impact of Results: What impact do these results have on the type of opinion that you will give on the client’s internal controls? E. Potential misstatements: Indicate the potential misstatements that could result from the control deviations. F. Substantive Audit Procedures: Determine what substantive audit procedures should be performed in response to each of the identified control deviations. G. Final Assessment: Do you feel confident that the sample you selected provides a good assessment of internal controls? Why or why not? Your table should be submitted as an Excel Spreadsheet. You can include bullet points. Make sure that the analysis is clearly stated in each column.

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