Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Indicate the action the auditor should take for the sampling results described below: Additional facts (these are the same for each problem of this type

Indicate the action the auditor should take for the sampling results described below: Additional facts (these are the same for each problem of this type unless altered by information given for each case): Book value of the population is $3,000,000 Sampling tolerable misstatement is $50,000. Base your decisions on tolerable misstatement, rather than overall planning materiality. The audit misstatement posting threshold is $10,000 Adjustments are not proposed unless necessary. . It is feasible to expand the sample, if necessary. The projected error is an estimate of the total error in the population, including the actual errors identified. Ignore sampling risk. $25,000 actual misstatements (15 pricing errors in a sample of 100 items). Client is willing to adjust for actual errors. $240,000 projected misstatement O Accept population as fairly stated and take no further action. O Place the entire projected error on the summary of possible adjustments. O Prepare an adjustment for the actual errors, and place unadjusted errors on the summary of possible adjustments. O Propose an adjustment for actual errors and perform additional testing. O Treat the errors as an anomaly and perform additional testing in a specific area. O Request the client fix the population

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

Introduction To Management Accounting

Authors: Charles T. Horngren, Gary Sundum, Gary L. Sundem

8th Edition

ISBN: 0134870751, 978-0134870755

More Books

Students also viewed these Accounting questions