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You have been asked to test the effectiveness of Ingo Corporation's control of manually approving...

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Accounting

You have been asked to test the effectiveness of Ingo Corporation's control of manually approving all purchases over $25,000. During the year, Ingo Corporation has made 1,000,000 purchases, of which 3,000 were over $25,000. Jian Zhang, CPA, your supervisor, asked you to use a tolerable deviation rate of 4 percent (although she expects the rate to be only approximately 1.25 percent) and a 5 percent risk of assessing control risk too low. Use the following to determine the planned assessed level of control risk and the assessed level of control risk.
\table[[(Planned) Assessed Level of Control Risk,\table[[Tolerable],[Deviation],[Rate]]],[\table[[Low],[Moderate]],2-7%
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