Question
Inventory has 1,000 SKU items and a book value of $2,908,144. You test a sample of 200 SKU items having a book value of $581,629.
Inventory has 1,000 SKU items and a book value of $2,908,144. You test a sample of 200 SKU items having a book value of $581,629. The audited value of your sample is $524,629 indicating $57,000 error in the sample. If tolerable error is $290,000, would you conclude that inventory is
- materially overstated
- not materially overstated
- need additional evidence
- materially understated
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Financial Accounting
Authors: Robert Libby, Patricia Libby, Daniel G. Short
3rd Edition
0072458836, 978-0072458831
