1. If, in a substantive test of sales revenue for a year, the auditors performed their principal audit procedures through 30 Sept, and continued to test internal controls over sales revenue by: observation, inspection and inquiry; and analytical procedures. The auditors assessed the estimated misstatement to be $0 in both the interim and stub periods, and the allowance for misstatement for the interim and stub periods as follows:

Interim period Allowance for misstatement, Aint = $300,000

Stub period Allowance for misstatement, Astub = $100,000

Calculate the auditor's assessed allowance for misstatement for the year. (Do the actual calculation. Do not just enter the result).

2. The auditors plan to apply statistical sampling in a test of the existence assertion for a population of open sales invoices. Prior to performing the test, the audit partner changes the each of the following (independently):

a. Audit risk is changed from 10% to 5%. What is the impact on:

NATURE OF TEST

EXTENT OF TEST

TIMING OF TEST

b. The tolerable misstatement has been increased from $50,000 to $100,000. What is the impact on:

NATURE OF TEST

EXTENT OF TEST

TIMING OF TEST

Please show all working ASAP. Thank you