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Assume that the auditor has examined the supporting documentation for additions to property, plant and equipment and found a net monetary overstatement in the sample.

Assume that the auditor has examined the supporting documentation for additions to property, plant and equipment and found a net monetary overstatement in the sample. The relevant information is shown below: Amount of additions $1200,000 Number of additions 1,000 Sample size 60 Dollar value of sample $100,000 Tolerable misstatement $50,000 Misstatement found in sample $2,000 Required: (a) Calculate the projected misstatement, using the dollar unit sampling, where each dollar is weighted evenly. (3 marks) (b) Comment on the results obtained in (a). (2 marks) (c) Assume if a sample result suggests that there is a material misstatement in the population, what actions may an auditor take in response to this finding?

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