Question
Price Waterhouse Coopers, a national accounting firm, has hired you to do the audit of Barbarosa Ltd., a large cattle ranch. After going over the
Price Waterhouse Coopers, a national accounting firm, has hired you to do the audit of Barbarosa Ltd., a large cattle ranch. After going over the notes in the file, you find that the inherent risk of a material error in inventory is 20%. They have good controls in place which are anticipated to catch any material errors 90% of the time. The procedure you have decided to perform to verify the inventory amount on the financial statements has an 85% chance of revealing any material error in the balance. After you have preformed the planned procedure, which of the following numbers is the RMM for inventory?
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