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List the steps involved in selecting and evaluating a nonstatistical or a statistical sample for tests of controls Answer

List the steps involved in selecting and evaluating a nonstatistical or a statistical sample for tests of controls. Identify the professional judgments that must be made associated with each step.

There are nine steps to evaluating the nonstatistical and statistical sample:

  1. Determining the Objectives of the Test Controls: This involves the use of rate of deviation in the test controls to the overall population.
  2. Determining Procedures to Evaluate Internal Controls: This step determines the nature and timing of the audit. The auditors observes how people work and use the controls, inspecting physical documents and electronic files to determine if procedures are effective.
  3. Make a Decision about the Audit Sampling Technique: This step is when an auditor decides whether to use sampling that is nonstatistical or statistical. The smaller system usually uses nonstatistical, larger systems usually use statistical sampling.
  4. Define the Population and Sampling Unit: The population is determined by where the control should be used. The sampling unit show the auditor identifies the program changes made in the population over a period of time.
  5. Use Professional Judgment to Determine Sample Size: Determining size of the sample involves several factors. “The nature of control, frequency of operations, importance of the control, risk assessing control risk, tolerable deviation rate, expected population deviation rate, and population size either direct or indirect below 5000” (Boynton & Johnson, 2006, p. 561 – 562).
  6. Select Representive Sample: If using nonstatistical sample the use of professional judgment is involved. Statistical samples are usually a random sampling out of the population being tested.
  7. Apply Audit Procedures: The auditor determines if controls are operating effectively and are applied right within the sample selected.
  8. Evaluate the Sample Results: This evaluation comes from comparing tolerable deviation rate and deviation rate with quantitative results. The closer the rate the more reasonable that low risk is wrong for the evaluation. The evaluation must determine from the evidence if the rating is low, medium, or high. The qualitative consideration is determining errors in deviation and how the deviation relates to the auditing process in other areas.
  9. Document Conclusion; this step involves documenting test results into working papers and the basis for a conclusion.

 

Reference

 

Boynton, W. & Johnson, R. (2006). Modern Auditing: Assurance Services and the Integrity of Financial Reporting (8th ed.). Wiley, Hoboken, N.J.

 

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Change in Climate of Earth and Challenges faced by Dinosaurs Answer

Change in Climate of Earth and Challenges faced by Dinosaurs

Introduction

The Earth probably came into existence about 4 – 6 billion years ago. It is presumed that life originated on Earth about millions of years ago and since then innumerable varieties of living beings have evolved. The original temperature of earth is estimated to be around 5,000-6,000 c. There was well formed atmosphere at that time, but it did not contain free Oxygen. With the cooling of the Earth, free atoms in the atmosphere came together and formed inorganic molecules. Further evolution resulted in the diverse forms of existing organisms. The history of evolution of life on Earth is constructed by the study of fossil plants and animals from various strata of the Earth. The most abundant fossils are formed by petrifaction in which hard parts like bones, teeth and exoskeleton of organisms were preserved in the rock strata. By studying different types of fossils in different rock strata and determining their age, geologists have constructed a geological time scale which is the calendar of Earth’s past history.

Mezozoic Era is the “Age of Dinosaurs”. This Era began about 251 million years ago and ended about 65 million years ago. It is divided into three periods: Triassic (251 to 199 Ma), Jurassic (199 to 147 Ma) and Cretaceous (147 to 65 Ma). Reptiles evolved in this era and became rulers of the Earth. They occupied land (Dinosaurs), sea (Ichthyosaurs) and air (Pterosaurs). Dinosaurs evolved in Triassic period and spread during the Jurassic period. However they dominated Cretaceous period. Since then there has been a great transition in the climate and atmosphere of Earth.

Comparison of Climate, Flora and Fauna of Earth today and 65 million years ago (Late Cretaceous period)

Cretaceous period was marked with the growth and spread of Angiosperms (flowering plants). They had dense leaves, stems and branches. Plants like magnolias, roses, willows and redwood trees were found in large numbers. Even grass, oak, maple, grape, el also came into existence.

Due to large number of flowering plants, this period also saw the presence of insects similar to today’s insects. Termites and ants appeared in the late Cretaceous period. Evolution of aquatic organisms is also observed. Crabs, lobsters, sea urchins, foraminifers, nautiluses are some of the marine invertebrates which were found in the Cretaceous period. Appearance of modern sharks was also seen. Recently, it has been found out that Myledaphus bipartitus (a guitar fish) was also present 75Ma (Wilson and Newbrey et al., 2013). Diversification of birds was also seen in this period. However, reptiles dominated the Earth 65 million years ago and this period was marked with large numbers of dinosaurs. Reptiles reached their zenith, including the dinosaurs Triceratops, Tyrannosaurus, Stegosaurus, Apatosaurus (Brontosaurus), and Iguanodon, and ranged from herbivores to carnivores. The flying retiles like pterosaurs and aquatic ichthyosaurs, plesiosaurs were also developed. Even the reptiles like snakes, lizards, crocodiles appeared (Infoplease.com, 2013). However, mammals were small and rare.

During the start of Mezozoic Era, temperature was warm and dry. Before appearance of Dinosaurs, temperature was around 10-15C and the climate had become warmer by the end of Triassic period. During the beginning of Cretaceous period, Pangea had already drifted apart and it had also split into many continents. About 65 million years ago, near the end of Mezozoic era, North America separated from Europe. This generated new coastline, growing of seasons and thus cooling of global climate took place. Thus during the end of Cretaceous period, lowering of temperature was seen. Thus dinosaurs also had to suffer from climate change.

The temperature of Cretaceous period was warmer than today although there was a cooling trend (Hallam A.J., 1985). The mean temperature during Cretaceous period is estimated to be around 21 degree Celsius which is 6C higher than current mean temperature (15C) (Ncdc.noaa.gov, 2013). There was higher concentration of greenhouse gases like carbon dioxide in the Cretaceous period (Sellwood and Price et al., 1994). Mammals have evolved to more complex human beings today as compared to Cretaceous period where there we very less and small mammals. One of the major reasons of extinction of dinosaurs is abrupt cooling of temperature (abrupt climate change). Earth is facing abrupt climate change now also which is one of the reasons for non-existence of dinosaurs today.

Challenges faced by dinosaurs

Apart from abrupt changes in temperature, there are some other reasons which might account for non-existence of non-avian dinosaurs today. An animal like dinosaurs requires large amount of Oxygen to carry out its metabolism due to its large body size. But the concentration of Oxygen has decreased now which might be a hindrance in its survival. Also due to deforestation, there is lack of habitat and prey.

Conclusion

Based on past climate patterns it is be likely that Earth’s climate would be directed back into an Ice Age within the next few thousand years. But current data shows that much of the climate system is in fact heating up due to global warming. Some recent evidences also suggest that dinosaur’s were warm blooded and had survived in a warmer climate than today but the abrupt climatic and geographical changes suggest for the non-existence of non-avian dinosaurs.

Reference:

Hallam, A. J. geol. Soc. Lond. 142, 433−445 (1985).

Infoplease.com (2013). Cretaceous period: Evolution of Plant and Animal Life |

Infoplease.com. [online] Retrieved from: http://www.infoplease.com/encyclopedia/science/cretaceous-period-evolution-plant-animal-life.html [Accessed: 16 Sep 2013].

Ncdc.noaa.gov (2013). Future Forecasts. [online] Retrieved from:

http://www.ncdc.noaa.gov/paleo/ctl/future1.html [Accessed: 16 Sep 2013].

Sellwood, B., Price, G. and Valdest, P. (1994). Cooler estimates of Cretaceous temperatures.

Nature Publishing Group. 370, 453 – 455

Wilson, A., Newbrey, M., Brinkman, D., Cook, T. and Neuman, A. (2013). Age and growth

in Myledaphus bipartitus, a Late Cretaceous freshwater guitarfish from Alberta, Canada. Canadian Journal of Earth Sciences, 50(9): 930-944, 10.

 

 

 

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From the scenario for Katrina’s Candies, examine the key factors affecting the demand for and the supply of a good in general and Katrina’s Candies specifically Answer

Fundamental Economic Concepts” Please respond to the following: From the scenario for Katrina’s Candies, examine the key factors affecting the demand for and the supply of a good in general and Katrina’s Candies specifically.

Answer – The key factors affecting the demand for a good in general and Katrina’s Candies specifically are:-

    1. Price of substitute goods – Substitute goods are the ones which can be used in place of the similar other good. For eg, Tea and coffee are substitute of each other. If the price of substitute goods rises, then it will lead to rise in the demand of other good. Similarly, if the price of the substitute of Katrina’s candy rises, then it will lead to rise in the demand of Katrina’s candies.
    2. Price of complementary goods- complimentary goods are the one which are used with the consumption of the other good. For example car and petrol are used side by side. Similarly, Katrina’s candies are used with the other complementary good such as chocolate shake or strawberry shake. When the price of complementary goods rises, the quantity demanded of the other good falls.
    3. Income – When the income of an individual rises, the quantity demanded of Katrina’s candy rises because people can afford more of candies now at same price.
    4. Preference or tastes, advertising expenditures – As preferences or tastes of an individual changes towards Katrina’s candy and more people would like to buy Katrina’s candy, then the quantity demanded of Katrina’s candy will rise.
  • Number of buyers – As the number of buyers in the market for a particular product increases, there will be rise in the quantity demanded of the candy.

 

Distinguish between a change in demand and a change in the quantity demanded (movement along the demand curve). From the above, indicate the factors that are responsible for a shift in demand; and explain how the change is effected by these factors.

Answer – Change in demand consists of two things –

  1. Change in quantity demanded
  2. Change in demand.Change in quantity demanded means when there is change in price of the Katrina’s candy, then there is movement along the demand curve. Only factor affecting the quantity demanded is the price, keeping other things constant. Next is change in demand, it means that there is change in demand of a Katrina’s candy due to other factors affecting demand such as:-

The price of the sugar-free chocolate;

The price of caffeinated coffee;

The price of water;

The median income of consumers; and

PRICE

The number of buyers in the market.

 

PRICE
QUANITY
SHIFT IN THE DEMAND CURVE
QUANTITY
MOVEMENT ALONG THE SAME DEMAND CURVE

Indicate the factors that are responsible for a shift in supply; and explain how the change is affected by these factors.

Answer – Shift in supply of Katrina’s candy will occur only when there is change in the factors affecting supply of the good other than price.

Factors such as change in costs such as change in labor or raw material costs will shift the position of the supply curve.

If costs rise, then there will be less production at any given price and the supply curve will shift to the left.

However, if there is fall in the costs of production then more quantity will be produced at the same price.

Other factors affecting the supply of the candy are such as change in the availability of factors, or changes in weather, taxes and subsidies will shift the supply curve to the right.