Auditing-1

You are completing your audit of ABC Ltd, an importer of Computer from China. Total sales this year were $77,500,000. The results of your audit work on inventory are summarized in the following table:

Description # of SKU's $ Value

Population 140 $6,000,000

Sample 48 $2,000,000

Errors found 7 200,000

Using the monetary unit method, calculate the projected inventory error, and assess it against materiality.