An auditor expects no errors in an audit population but is concerned about potential monetary overstatement and, therefore, elects to use probability-proportional-to-size sampling. Recorded book value is $1,200,000, maximum tolerable overstatement is

$67,500, and the risk of incorrect acceptance is preset at 15 percent.

After sample size is determined and sampling units are selected and examined, the following differences are noted:

Required:
1. Calculate sample size.
2. Calculate the allowance for sampling risk.
3. Reach a conclusion.

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Invoice No. Recorded Value Audited Value 1826 $15,000 $12,000 2041 $16,000 $15,050