In the audit of Price Seed Company Ltd. for the year ended September 30, the auditor set a tolerable misstatement of \($50,000\) at an ARIA of 10 percent. An MUS sample of 100 was selected from an accounts receivable population that had a recorded balance of \($1,975,000\). The table at the top of the next page shows the differences uncovered in the confir¬ mation.

Required

a. Calculate the upper and lower misstatement bounds on the basis of the client misstatements in the sample

b.Is the population acceptable as stated? If not, what options are available to the auditor at this point? Which option should the auditor select? Explain.

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TABLE FOR PROBLEM 14-23 ACCOUNTS RECEIVABLE PER RECORDS ACCOUNTS RECEIVABLE PER CONFIRMATION $2,498.00 -0- $1,190.00 1 $2,728.00 2. $5,125.00 3. $3,890.00 4. $ 791.00 5. $ 548.00 $ 815.00 $1,037.00 $3,190.00 -0- 4557 7. $3,115.00 $1,540,00 FOLLOW-UP COMMENTS BY AUDITOR Pricing errors on two invoices Customer mailed cheque 269, company received cheque 3/10. Merchandise returned 30/9 and counted in inventory; credit was issued 6/10. Footing error on an invoice. Goods were shipped 28/9, sale was recorded on 6/10. Pricing error on a credit memorandum. Goods were shipped on 29/9; customer received goods 3/10; sale was recorded on 30/9.