Please answer all of the questions below. This is all the information that are given. Thank you.

Question 5 7 Marks The results of substantive testing of sales invoices at Mahoney Limited are as follows: Stratum Error found Sample total Stratum total Projected value value error $14,300 $202,500 $264,800 2 $6,400 $83,400 $157,500 3 $16,200 $125,700 $330,800 Total $36,900 $411,600 $753, 100 The three strata correspond to different departntents and the overall tolerable error is set at $78,000. Required: (a) Complete the 'Projected error' column in the table above and show working in the space provided below. (3 marks) (b) With a tolerable error set at $78,000 is the total projected error material? Briefly explain your answer. (2 marks) Question 5 continued over next pageQuestion 5 continued (c) What is a substantive audit test? (2 marks) (d) If the auditor concluded internal controls could not be relied on, what impact would this have on the overall audit strategy? (2 marks)Question 5 10 Marks (a) The total value of accounts payables is $2,600,000 consisting of 950 items. The auditor randomly selected 85 items for testing. The dollar value of the sample of accounts payables selected for testing is $290,000. Assume the auditor discovered errors totalling $27,600 when conducting the substantive testing of the sample. Required: Extrapolate the errors to the population and calculate the total projected error. Show all workings. (3 marks) (b) What would the auditor do if the projected error calculated in (a) above exceeded the tolerable error set for materiality? (3 marks) Question 5 continued over next pageQuestion 5 continued (c) What difference would it make if the tolerable error was set at $65,000? (2 marks)