James Patel is auditing the accounts receivable of Carter Ltd for the year ended 30th June 2019.

Carter's accounts receivable balance was recorded at $4,000,000 and comprised more than 3,000

customer accounts. However Carter's 20 largest customer balances comprised a high percentage of the recorded accounts receivable (more than $2,500,000 or 25%). As a result, James is considering

using Dollar Unit Sampling.

Based on prior audits and other judgments, James has established the following parameters:

Risk of Incorrect Acceptance 10%

Tolerable Error $350,000

Expected Error $250,000

Required:

a. Determine the required sample size that would be used by James in the audit of Carter Ltd.

Show all workings/logic/approach - marks will be awarded for your

workings/logic/approach.

b. Calculate the sampling interval - show all workings.

c. explain the concept of tolerable error in sampling - (please don't copy from websites or any other documents).

Please don't copy from the documents it contains different numericals.