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You are planning to use nonstatistical sampling to evaluate the results of accounts receivable confirmation...

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Accounting

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You are planning to use nonstatistical sampling to evaluate the results of accounts receivable confirmation for the Timber Company. You have already performed tests of controls for sales, sales returns and allowances, and cash receipts, and they are considered excellent. Because of the quality of the controls, you decide to use an acceptable risk of incorrect acceptance of 10%, rther than a lower percentage. There are 3,200 accounts receivable with a gross value of $6,580,000. The accounts are similar in size and will be treated as a single stratum. Tolerable misstatement for this test of accounts receivable confirmations is $140,000 Read the requirements. Requirement a Calculate he required sample size. Assume your firm uses ne folowing nonstatistical ormula to determine sample size. Sample sze = Population Recorded Amount x Confidence Factor) / Tolerable misstatement. A confidence factor of 2 is used for a 10% ARIA. Population recorded amount Confidence factor Tolerable misstatementSample size

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