2. Evan Kristopher, CPA intends to use monetary unit sampling. He has...
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Accounting
Evan Kristopher, CPA intends to use monetary unit sampling. He has properly selected and audited a sample of accounts receivable from his clients population of accounts. He calculated a sampling interval of $ and the tolerable misstatement for the account is $
Evan also recalls that basic precision is equal to the appropriate reliability factor multiplied times the sampling interval. He wishes to accept a risk of incorrect acceptance of
He found that of the accounts in the sample were properly calculated. However, the following three errors existed:
Book Value Audited Value
$ $
Required:
a Calculate the projected misstatement.
b Calculate the basic precision.
c Calculate the incremental allowance.
d Calculate the upper limit on misstatement.
e What would the auditors conclusion be for the population based on the analysis?
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