Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

17-27) You are planning to use nonstatistical sampling to evaluate the results of accounts receivable confirmation for the Meridian Company. You have already performed tests

17-27) You are planning to use nonstatistical sampling to evaluate the results of accounts receivable confirmation for the Meridian Company. You have already performed tests of controls for sales, sales, returns and allowances, and cash receipts, and they are considered excellent. Because of the quality of the controls, you decide to use an acceptable risk of incorrect acceptance of 10%. There are 3,000 accounts receivable with a gross value of $6,900,000. The accounts are similar in size and will be treated as a single stratum. An overstament of understatement of more than $150,000 is considered material. Required: a. Calculate the required sample size. Assume your firm uses the following nonstatistical formula to determine sale size: Sample size = (Book value of population / Tolerable misstatement) x Assurance factor An assurance factor of 2 is used for a 10% ARIA

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Core Concepts Financial Analysis

Authors: Gary Giroux

1st Edition

047146712X, 9780471467120

More Books

Students also viewed these Accounting questions

Question

What is a grievance? Describe the typical grievance procedure.

Answered: 1 week ago

Question

1. Why do we trust one type of information more than another?

Answered: 1 week ago