In the audit of Price Seed Company for the year ended September 30, the auditor set a tolerable misstatement of $50,000 at an ARIA of 10%. A PPS sample of 100 was selected from an accounts receivable population that had a recorded balance of $1,975,000. The following table shows the differences uncovered in the confirmation process:

Accounts Receivable per Records		Accounts Receivable per Confirmation	Follow-up Comments by Auditor
1.	$ 2,728.00	$ 2,498.00	Pricing error on two invoices.
2.	$ 5,125.00	-0-	Customer mailed check 9/26; company received check 10/3.
3.	$ 3,890.00	$ 1,190.00	Merchandise returned 9/30 and counted in inventory; credit was issued 10/6.
4.	$ 791.00	$ 815.00	Footing error on an invoice.
5.	$ 548.00	$ 1,037.00	Goods were shipped 9/28; sale was recorded on 10/6.
6.	$ 3,115.00	$ 3,190.00	Pricing error on a credit memorandum.
7.	$ 1,540.00	-0-	Goods were shipped on 9/29; customer received goods 10/3; sale was recorded on 9/30.

Required

• a. Calculate the upper and lower misstatement bounds on the basis of the client misstatements in the sample.
• b. Is the population acceptable as stated? If not, what options are available to the auditor at this point? Which option should the auditor select? Explain.