Internal control to test for credit approval?
For the AUD section of the CPA exam, you should understand how the audit team would test whether customer orders were properly approved to purchase on credit. For testing internal controls, we would utilize attribute sampling, which uses yes or no type of attributes. So for this situation, we would look to say “Yes, the credit was approved” or “No, the credit was not approved”. The population would be all customer orders within the given period that required credit approval, and the audit team would sample from that population.
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