Consider the example provided in the chapter for selecting a sample for dollar unit sampling application, where

Question:

Consider the example provided in the chapter for selecting a sample for dollar unit sampling application, where sample size is computed as

$n=\frac{\mathrm{BV}^{*} \mathrm{R} * \mathrm{ETF}}{(\mathrm{TEL}-\mathrm{EEL})}$

Where:

image text in transcribed

and:
\[ n=\left(B V^{*} \mathrm{R}^{*} \mathrm{ETF}\right) /(\mathrm{TEL}-\mathrm{EEL})=(\$ 600,000 \times 4.75 \times 1.00) /(\$ 24,000-\$ 0)=119 \]
Explain the rationale for why 119 "sample units" should be sufficient for the auditor to draw statistical conclusions about accounts receivable based on the results of the test(s) performed. As part of your discussion, consider the roles of TEL, EEL, ETF, and ARIA.