 In this presentation, we will take a look at Attribute Sampling Applied to Test of Controls. When conducting a statistical sample for a test of controls, auditing standards require the auditor to properly plan, perform, and evaluate sampling application and to adequately document each phase of the sampling application. Those phases including the planning, the performance, evaluation, and document. We're going to go through each of these phases, of course, starting with the first one, that being the planning phase. Within planning, we will set test objectives. Objective of Attribute Sampling when used for tests of controls is to evaluate operating effectiveness of the internal controls. We will define the population's characteristics, those including define the sampling population, define the sampling unit, define the control deviation conditions, discuss these items in more depth shortly. Next, we will set the sample size using desired confidence level or risk of incorrect acceptance, tolerable deviation rate, expected population deviation rate. Again, we will go into these items in more depth shortly. Now we're going to go into the definitions up here and then define the population characteristics starting with the defined the sampling population. What does it mean to define the sampling population? That's going to be all or a subset of the items that constitute the class of transactions make up the sampling population. So the sampling population is the entire population. For example, if we wanted to test something, say we're testing an internal control related to the purchasing process, some type of verification within the purchasing process. We have the purchasing documentation going through. We want to check if there's some type of verification in accordance with the set of controls, which may be indicated, say by initials related to that documentation. So the population size then would be all of the documents that would be involved in this purchasing documents that should have this indication on it that they have been properly verified in accordance with the internal control. That's going to be the entire full population or the sampling population. To find the sampling unit, the sampling unit then is each sampling unit makes up one item in the population. So in this case, it would be one of the purchase order documents that we're looking for that would have this indication that it does have the verification on it. This sampling unit will be defined in relation to the control being tested. So that's going to be our units that we're going to be testing. We're going to be testing these units. And then we're going to be testing to see if they apply or are in compliance with what we are looking for. In this case, we're going to say some type of initial that would indicate the verification. To find the control deviation condition, a deviation is a difference from the adequate performance of the internal control. So if we were to, for example, look at this document, be expecting some initial that would indicate the verification, and we don't find that, then that would be the deviation. We have to say, okay, there's going to be an item that we have found that's a deviation. Doesn't mean that the whole population is now wrong because we might expect, depending on the type of controls that we will have some deviation, but we're testing the amount of deviation within that basic sample size that we're then going to apply to the entire population. Then if we go to the set, the sample sizing size using desired confidence level or risk of incorrect acceptance. So we're thinking about the setting of the sample size, looking specifically at the desired confident level or risk of incorrect acceptance acceptance. Confidence level is this desired level of assurance that sample results will support the conclusion that the control is functioning effectively. Usually when the auditor has decided to rely on controls, the confidence level is set at 90% or 95%. So notice we're getting very specific in our testing here using statistical sampling, actually using the units of 90 to 95%. This means the auditor is willing to accept a 10% or 5% risk of accepting control as effective when it is not. So that means