Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume that you are preparing to confirm accounts receivable at December 31, 2022, which is one month prior to the fiscal yearend of January 31,

Assume that you are preparing to confirm accounts receivable at December 31, 2022, which is one month prior to the fiscal yearend of January 31, 2023. The book value of gross accounts receivable is $71,622,804. Complete the following requirements related to the confirmation of receivables for Cloud 9 based on previous work and the following information. Required a. Using PPS sampling, determine the sample size that you want to use for sending accounts receivable confirmations. Draw on the information you learned about PPS sampling in Chapter 10. The book value of accounts receivable before the allowance for doubtful accounts is $71,622,804. You make the following assumptions: You set tolerable misstatement for accounts receivable at $3,500,000. Expected misstatement = $750,000. Risk of incorrect acceptance = 37%. Given these parameters: 1. What do you believe to be appropriate qualitative assumptions for inherent risk and control risk given the risk of incorrect acceptance used? 2. What do you calculate for sample size? 3. What do you calculate for sampling interval?

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

Valuation The Art and Science of Corporate Investment Decisions

Authors: Sheridan Titman, John D. Martin

3rd edition

133479528, 978-0133479522

Students also viewed these Accounting questions