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Use the tables below to solve the problem. Complete each part of the problem in the spaces provided. Make sure to show all of your work and label all calculations. Monetary Unit Sampling Problem Greta Garbo, CPA was conducting the audit of Deborah Kerr, Inc. for the year ended December 31, 2020. Greta plans to use monetary unit sampling (MUS) to audit Deborah Kerr's accounts receivable account. The balance of accounts receivable at December 31, 2020 was $9,500,000 Required: a. Based on the following information, compute the required MUS sample size and the sampling interval. Use the tables provided and show all of your work. Round calculations to the nearest dollar. Tolerable misstatement = $475,000 Expected misstatement = $95,000 Risk of incorrect acceptance = 10% b. Greta used the sample items selected in part (a) and performed the audit procedures listed in the accounts receivable program. She found the following misstatements: Rank Account Marlon Brando Humphry Bogart Audrey Hepburn Katharine Hepburn Bette Davis Marilyn Monroe Richard Burton Elizabeth Taylor Ingrid Bergman Cary Grant Book Value 12,500 75,900 88,000 123.900 75,250 65,800 147.100 42,900 65,175 29,600 Audit Value Tainting Factor 8,500 45,540 77,440 107,793 81,270 49,350 102,970 39,468 0 27,824 Using this information and the sampling tables provided, complete the tables above and on the top of the next page. Show all of your calculations (use the third page, which is blank, if necessary). Round your calculations of the sampling interval, the projected misstatement and the upper misstatement limit to the nearest dollar, Account Tainting Factor Effects of Overstatements Sampling Projected Interval Misstatement Upper Limit Increment Upper Misstatement Basic Precision + Upper Misstatement Limit Effects of Understatements Tainting Factor Sampling Interval Account Projected Misstatement Net Upper Misstatement Limit = Should Greta conclude that Deborah Kerr's accounts receivable is materially misstated or not? Why? Statistical Sample Sizes for Attribute Sampling - 95 Percent Confidence Level Expected Population Deviation Rate 2% 3% 4% Tolerable Deviation Rate 6% 7% 8% 5% 9% 10% 15% 20% 149 236 99 157 157 208 49 78 78 78 74 117 117 117 156 156 192 227 59 93 93 93 93 124 124 153 181 208 78 103 103 127 0.00% 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 5.00 6.00 7.00 42 66 66 66 66 66 66 88 88 88 109 109 129 148 167 185 36 58 58 58 58 58 58 77 77 77 77 95 95 112 112 129 185 127 150 173 195 32 51 51 51 51 51 51 51 68 68 68 68 84 84 84 100 100 158 29 46 46 46 46 46 46 46 46 61 61 61 61 61 76 76 89 116 179 19 30 30 30 30 30 30 30 30 30 30 30 30 30 40 40 40 40 50 68 14 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 30 30 37 Statistical Sample Sizes for Attribute Sampling - 90 Percent Confidence Level Expected Population Deviation Rate 2% 3% 4% Tolerable Deviation Rate 6% 7% 8% 5% 9% 10% 15% 20% 144 194 194 265 76 129 129 129 176 221 57 96 96 96 96 132 132 166 198 0.00% 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 5.00 6.00 7.00 45 77 77 77 77 77 105 105 132 132 158 209 38 64 64 64 64 64 64 88 88 88 110 132 132 158 209 32 55 55 55 55 55 55 55 75 75 75 94 94 113 113 131 149 28 48 48 48 48 48 48 48 48 65 65 65 65 82 82 98 98 160 25 42 42 42 42 42 42 42 42 42 58 58 58 58 73 73 73 115 182 22 38 38 38 38 38 38 38 38 38 38 52 52 52 52 52 65 78 116 199 15 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 34 43 52 11 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 25 25 Statistical Sample Results Evaluation Table for Attribute Sampling - 95 Percent Desired Confidence Level Sample Size 0 Actual Number of Deviations Found 3 4 5 6 1 2 7 8 9 10 25 30 35 40 45 50 55 60 65 70 75 80 90 100 125 150 200 11.3 9.5 8.3 7.3 6.5 5.9 5.4 4.9 4.6 4.2 4.0 3.7 3.3 3.0 2.4 2.0 1.5 17,6 14.9 12.9 11.4 10.2 9.2 8.4 7.7 7.1 6.6 6.2 5.8 5.2 4.7 3.8 3.2 2.4 19.6 17.0 15.0 13.4 12.1 11.1 10.2 9.4 8.8 8.2 7.7 6.9 6.2 5.0 4.2 3.2 18.3 16.4 14.8 13.5 12.5 11.5 10.8 10.1 9.5 8.4 7.6 6.1 5.1 19.2 17 15.9 14.7 13.6 12.6 11.8 11.1 9.9 9.0 7.2 6.0 19.9 18.2 16.8 15.5 14.5 13.6 12.7 11.4 10.3 8.3 6.9 18.8 17.4 16.3 15.2 14.3 12.8 11.5 9.3 7.8 5.9 19.3 18.0 16.9 15.9 14.2 12.8 10.3 8.6 6.5 19.7 18.5 17.4 15.5 14.0 11.3 9.5 20.0 18.9 16.8 15.2 12.3 10.3 0.8 18.2 16.4 13.2 11.1 8.4 3 3.9 4.6 5.2 7.2 Statistical Sample Results Evaluation Table for Attribute Sampling - 90 Percent Desired Confidence Level Sample Size 0 1 Actual Number of Deviations Found 3 5 6 7 2 8 10 10.9 8.8 7.4 6.4 5.6 5.0 4.6 4.1 20 25 30 35 40 45 50 55 60 70 80 90 100 120 160 200 18.1 14.7 12.4 10.7 9.4 8.4 7.6 6.9 6.4 5.5 4.8 4.3 3.9 3.3 2.5 2.0 19.9 16.8 14.5 12.8 11.4 10.3 9.4 8.7 7.5 6.6 5.9 5.3 4.4 3.3 2.7 18.1 16.0 14.3 12.9 11.8 10.8 9.3 8.2 19.0 17.0 15.4 14.1 12.9 11.1 9.8 3.8 17.9 19.7 17.8 16.3 15.0 12.9 11.3 10.1 9.1 7.6 5.8 4.6 3.3 2.9 2.6 2.3 2.0 1.5 1.2 8.7 18.4 16.9 14.6 12.3 11.5 10.3 8.7 6.5 5.3 18.9 16.3 14.3 12.8 11.5 9.7 7.3 5.9 6.6 5,5 4.2 3.4 7.9 6.6 5.0 4.0 15.8 14.1 12.7 10.7 8.0 6.5 19.6 17.2 15.4 13.9 11.6 8.8 7.1 18.6 16.6 15.0 12.6 9.5 7.6 2 Use the tables below to solve the problem. Complete each part of the problem in the spaces provided. Make sure to show all of your work and label all calculations. Monetary Unit Sampling Problem Greta Garbo, CPA was conducting the audit of Deborah Kerr, Inc. for the year ended December 31, 2020. Greta plans to use monetary unit sampling (MUS) to audit Deborah Kerr's accounts receivable account. The balance of accounts receivable at December 31, 2020 was $9,500,000 Required: a. Based on the following information, compute the required MUS sample size and the sampling interval. Use the tables provided and show all of your work. Round calculations to the nearest dollar. Tolerable misstatement = $475,000 Expected misstatement = $95,000 Risk of incorrect acceptance = 10% b. Greta used the sample items selected in part (a) and performed the audit procedures listed in the accounts receivable program. She found the following misstatements: Rank Account Marlon Brando Humphry Bogart Audrey Hepburn Katharine Hepburn Bette Davis Marilyn Monroe Richard Burton Elizabeth Taylor Ingrid Bergman Cary Grant Book Value 12,500 75,900 88,000 123.900 75,250 65,800 147.100 42,900 65,175 29,600 Audit Value Tainting Factor 8,500 45,540 77,440 107,793 81,270 49,350 102,970 39,468 0 27,824 Using this information and the sampling tables provided, complete the tables above and on the top of the next page. Show all of your calculations (use the third page, which is blank, if necessary). Round your calculations of the sampling interval, the projected misstatement and the upper misstatement limit to the nearest dollar, Account Tainting Factor Effects of Overstatements Sampling Projected Interval Misstatement Upper Limit Increment Upper Misstatement Basic Precision + Upper Misstatement Limit Effects of Understatements Tainting Factor Sampling Interval Account Projected Misstatement Net Upper Misstatement Limit = Should Greta conclude that Deborah Kerr's accounts receivable is materially misstated or not? Why? Statistical Sample Sizes for Attribute Sampling - 95 Percent Confidence Level Expected Population Deviation Rate 2% 3% 4% Tolerable Deviation Rate 6% 7% 8% 5% 9% 10% 15% 20% 149 236 99 157 157 208 49 78 78 78 74 117 117 117 156 156 192 227 59 93 93 93 93 124 124 153 181 208 78 103 103 127 0.00% 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 5.00 6.00 7.00 42 66 66 66 66 66 66 88 88 88 109 109 129 148 167 185 36 58 58 58 58 58 58 77 77 77 77 95 95 112 112 129 185 127 150 173 195 32 51 51 51 51 51 51 51 68 68 68 68 84 84 84 100 100 158 29 46 46 46 46 46 46 46 46 61 61 61 61 61 76 76 89 116 179 19 30 30 30 30 30 30 30 30 30 30 30 30 30 40 40 40 40 50 68 14 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 30 30 37 Statistical Sample Sizes for Attribute Sampling - 90 Percent Confidence Level Expected Population Deviation Rate 2% 3% 4% Tolerable Deviation Rate 6% 7% 8% 5% 9% 10% 15% 20% 144 194 194 265 76 129 129 129 176 221 57 96 96 96 96 132 132 166 198 0.00% 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 5.00 6.00 7.00 45 77 77 77 77 77 105 105 132 132 158 209 38 64 64 64 64 64 64 88 88 88 110 132 132 158 209 32 55 55 55 55 55 55 55 75 75 75 94 94 113 113 131 149 28 48 48 48 48 48 48 48 48 65 65 65 65 82 82 98 98 160 25 42 42 42 42 42 42 42 42 42 58 58 58 58 73 73 73 115 182 22 38 38 38 38 38 38 38 38 38 38 52 52 52 52 52 65 78 116 199 15 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 34 43 52 11 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 25 25 Statistical Sample Results Evaluation Table for Attribute Sampling - 95 Percent Desired Confidence Level Sample Size 0 Actual Number of Deviations Found 3 4 5 6 1 2 7 8 9 10 25 30 35 40 45 50 55 60 65 70 75 80 90 100 125 150 200 11.3 9.5 8.3 7.3 6.5 5.9 5.4 4.9 4.6 4.2 4.0 3.7 3.3 3.0 2.4 2.0 1.5 17,6 14.9 12.9 11.4 10.2 9.2 8.4 7.7 7.1 6.6 6.2 5.8 5.2 4.7 3.8 3.2 2.4 19.6 17.0 15.0 13.4 12.1 11.1 10.2 9.4 8.8 8.2 7.7 6.9 6.2 5.0 4.2 3.2 18.3 16.4 14.8 13.5 12.5 11.5 10.8 10.1 9.5 8.4 7.6 6.1 5.1 19.2 17 15.9 14.7 13.6 12.6 11.8 11.1 9.9 9.0 7.2 6.0 19.9 18.2 16.8 15.5 14.5 13.6 12.7 11.4 10.3 8.3 6.9 18.8 17.4 16.3 15.2 14.3 12.8 11.5 9.3 7.8 5.9 19.3 18.0 16.9 15.9 14.2 12.8 10.3 8.6 6.5 19.7 18.5 17.4 15.5 14.0 11.3 9.5 20.0 18.9 16.8 15.2 12.3 10.3 0.8 18.2 16.4 13.2 11.1 8.4 3 3.9 4.6 5.2 7.2 Statistical Sample Results Evaluation Table for Attribute Sampling - 90 Percent Desired Confidence Level Sample Size 0 1 Actual Number of Deviations Found 3 5 6 7 2 8 10 10.9 8.8 7.4 6.4 5.6 5.0 4.6 4.1 20 25 30 35 40 45 50 55 60 70 80 90 100 120 160 200 18.1 14.7 12.4 10.7 9.4 8.4 7.6 6.9 6.4 5.5 4.8 4.3 3.9 3.3 2.5 2.0 19.9 16.8 14.5 12.8 11.4 10.3 9.4 8.7 7.5 6.6 5.9 5.3 4.4 3.3 2.7 18.1 16.0 14.3 12.9 11.8 10.8 9.3 8.2 19.0 17.0 15.4 14.1 12.9 11.1 9.8 3.8 17.9 19.7 17.8 16.3 15.0 12.9 11.3 10.1 9.1 7.6 5.8 4.6 3.3 2.9 2.6 2.3 2.0 1.5 1.2 8.7 18.4 16.9 14.6 12.3 11.5 10.3 8.7 6.5 5.3 18.9 16.3 14.3 12.8 11.5 9.7 7.3 5.9 6.6 5,5 4.2 3.4 7.9 6.6 5.0 4.0 15.8 14.1 12.7 10.7 8.0 6.5 19.6 17.2 15.4 13.9 11.6 8.8 7.1 18.6 16.6 15.0 12.6 9.5 7.6 2

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