| Course | AC410 Auditing |
|---|---|
| Unit | Unit 6 |
| Paper type | Sampling plan |
| Length | About 560 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Accounting |
| Updated | October 2026 |
Free sample paper for AC410 Unit 6
1,946 Claims, a Sample of 64 and a Rule Written First: A Unit 6 Sampling Plan for Warranty Claim Approvals
[Student Name]
Purdue University Global
AC410: Auditing
Unit 6 Sampling Plan
[Instructor Name]
[Date]
Hallcroft Lifts and every figure are composite; the guide, textbook and study cited are real, and the upper limits are computed from the binomial distribution.
Objective
To test whether the technical services manager, or a deputy with written authority, approved each warranty claim before the dealer's labor credit was posted. If the control operates, claims data can be used with more confidence in the team's independent estimate of the claim rate.
Population
All 1,946 warranty claims entered from January 1 through October 31, numbered in the warranty module. Before selecting, the team agreed the module's count to the claims summary in the general ledger support; both show 1,946. Claims from November and December will be covered by inquiry and by inspecting a smaller set at year end.
Definition of a Deviation
1. No technical approval recorded before the labor credit posted.
2. Approval by someone without written authority to approve claims.
3. A claim approved for a unit whose serial number shows it was out of warranty.
Sample Size
1. Risk of overreliance: 10 percent, because the team will still perform substantive procedures on the reserve.
2. Tolerable deviation rate: 6 percent, the most the team will accept and still rely on the control.
3. Expected deviation rate: 1 percent, based on last year's results.
4. Sample size from the attribute sampling tables: 64 (American Institute of Certified Public Accountants, 2019).
Selection
A spreadsheet generates the random claim numbers, and the seed is written in the workpaper so a reviewer can produce the same 64. Voided claim numbers drawn are replaced with the next random number and listed.
Evaluation Rule, Written Before Testing
Before any claim is drawn, the plan fixes the decision: if the upper deviation limit at 10 percent risk is at or below 6 percent, the team relies on the control; if it is higher, the team does not, however close the result.
For a sample of 64 at 10 percent risk, zero deviations give an upper limit of about 3.5 percent and one deviation about 5.9 percent, so either allows reliance. Two deviations give about 8.1 percent, which does not.
Evaluation
Two deviations were found. In one, a dealer's labor credit posted three days before the approval was recorded, during the April system conversion. In the other, a regional sales manager with no approval authority approved a claim for a large dealer group. Upper deviation limit: about 8.1 percent, above the 6 percent tolerable rate. The team will not rely on the control.
The nature of each deviation matters as much as the count. The first looks like a conversion problem; the second suggests sales staff can approve claims for their own dealers, a weakness that could inflate claims and the reserve. Research on working papers found auditors often treating errors in a sample as isolated and declining to project them, so the team records both as deviations without exception (Elder & Allen, 1998).
Consequences
The claim rate in the independent estimate will be tested substantively against repair records. The sales manager's access will be reported to management, and the team will ask whether other claims carried his approval (Arens et al., 2020).
References
American Institute of Certified Public Accountants. (2019). Audit sampling: Audit guide. AICPA.
Arens, A. A., Elder, R. J., Beasley, M. S., & Hogan, C. E. (2020). Auditing and assurance services (17th ed.). Pearson.
Elder, R. J., & Allen, R. D. (1998). An empirical investigation of the auditor's decision to project errors. Auditing: A Journal of Practice & Theory, 17(2), 71-87.
AC410 Unit 6 instructions, in plain terms
In the sixth AC410 unit, the task is a plan stating the population, how items are selected and how many, and on what basis. State the control or attribute being tested and why its result matters to the audit. Define the population with its dates and count, and reconcile that count to an independent total before selecting anything. List exactly what counts as a deviation. Give the risk of overreliance, the tolerable rate and the expected rate, with a reason for each, and derive the sample size from a recognized table. Describe the selection method so a reviewer could reproduce it. Write the evaluation rule before testing, then evaluate the results using the upper deviation limit, not the sample rate. Consider the nature of each deviation as well as the count. Cite the AICPA sampling guide, the textbook and one study in APA 7.
How this AC410 Unit 6 example is built
The objective names technical approval before a dealer's labor credit posts and links it to the claim rate estimate. The population section counts 1,946 claims through October and agrees them to the ledger support, with November and December covered separately. Three numbered deviation types follow. The sample size section sets each parameter in a numbered line and reaches 64 from the AICPA tables. Selection uses a spreadsheet with a recorded seed. The highlighted sentence fixes the reliance rule in advance, and a paragraph gives the upper limits for zero, one and two deviations. The evaluation finds two deviations, one from the April conversion and one approved by a sales manager without authority, cites Elder and Allen on projecting errors, and concludes against reliance. A short consequences section follows.
Reading the AC410 Unit 6 grading rubric
AC410 sampling plans are marked on whether each design choice is stated and justified. The population must be defined precisely and shown to be complete, since a sample from an incomplete population proves nothing. Deviations need a clear, testable definition. Risk, tolerable rate and expected rate each require a reason, and the sample size should follow from them through a recognized method. Graders reward selection that a reviewer could reproduce. The evaluation must use the upper deviation limit and compare it with the tolerable rate; comparing the sample rate instead is the most heavily penalized error. Analyzing what each deviation means, not just counting them, earns additional credit. Stating the consequence for the audit shows the purpose of sampling. APA 7 citations to the sampling guide complete the Purdue Global criteria.
Common AC410 Unit 6 mistakes, and how to avoid them
Unit 6 plans often skip reconciling the population, so the sample may come from an incomplete list. Deviations are defined loosely or not at all. Parameters appear with no reasons, and the sample size is chosen as a round number. Selection is called random without saying how. The decision rule is written after the results are known. The sample deviation rate is compared with the tolerable rate. Deviations are explained away as isolated and left out. The plan stops at a number and never says what the result changes. If your case tests a different control, such as purchase approvals or payroll changes, our writers can build the plan, the size and the evaluation from your section's figures.
Get an AC410 Unit 6 example written to your instructions
Within 24-48h, the plan, its size derivation and an evaluation rule arrive, every figure taken from your population. Name the control or account your Unit 6 prompt targets, give the population details and any risk levels it sets, and add the rubric; the first custom sample is free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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AC410 Unit 6 questions, answered
Why does the evaluation use an upper limit rather than the sample rate?
Because a sample rate describes only the items tested. One deviation in 64 is 1.6 percent, but the population rate could be higher, and at 90 percent confidence it could be as high as 5.9 percent. Reliance is justified only if that upper limit stays within the tolerable rate. Comparing the sample rate with the tolerable rate is the commonest evaluation error in this unit.
Where can I find a free AC410 Unit 6 sample paper?
This page holds a complete AC410 Unit 6 attribute sampling plan for a composite stair lift maker's warranty approvals, with population, deviations, sample size, selection, a pre-set rule, evaluation and APA 7 references.
What happens after the AC410 Unit 6 sample finds two deviations?
The upper deviation limit rises to about 8.1 percent, above the 6 percent tolerable rate, so the team does not rely on claim approvals and tests the claim rate substantively against repair records instead.
Why does a sales manager's approval count as a deviation in AC410 Unit 6?
He had no written authority to approve claims, and he approved one for a large dealer group he serves. That suggests sales staff can inflate claims for their own dealers, which matters more than the count alone.
Why reconcile the claim count before drawing the sample?
A sample says nothing about claims missing from the list it was drawn from. Agreeing the module's 1,946 claims to the ledger support first shows the population is complete.