b. If a risk of incorrect acceptance of 15% is specified in the sample design, the sampling interval is $2,000, and five misstatements are found as enumerated above, calculate:

1. Basic precision.

2. The incremental allowance for sampling risk.

3. The upper misstatement limit.

Assume the following misstatements were found in a PPS sample:

Sample Item, Book Value, Audit Value

1 $ 650 585

2 540 0

3 1,900 0

4 2,200 1,650

5 2,800 2,660

b. If a risk of incorrect acceptance of 15% is specified in the sample design, the sampling interval is $2,000, and five misstatements are found as enumerated above, calculate: 1. Basic precision. 2. The incremental allowance for sampling risk. 3. The upper misstatement limit. AP10.8 (LO 8) Challenging Evaluating a PPS sample Assume the following misstatements were found in a PPS sample: Sample Item Book Value Audit Value $ 585 $ 650 540 1,900 2,200 1,650 2,660 2,800