Following are data for four different audit populations. Mean-per-unit estimation will be applied to each population.

Required: 

1. Calculate an acceptable risk of incorrect acceptance for each population.

2. For Populations 1 and 3, calculate a desired allowance for sampling risk, assuming tolerable error is $100,000 and the risk of incorrect rejection is .10.

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99 .05 1. Allowable risk that monetary error greater than tolerable error might remain undetected after the auditor has completed all audit procedures. 2. The risk that, should errors greater than tolerable error occur, the internal controls fail to detect them. 3. The risk that analytical procedures and other tests fail to detect errors greater than tolerable error that occur and are not detected by internal control. 2 Population 3 4 .10 .07 .05 .20 .30 1.00 .50 .50 .80 .70 70 .70 70