Ques. 1 Substantive Testing Problem This is a comprehensive PPS/MUS Sampling problem

The information below pertains to your current client ACC400-500, Inc..

Table A: General Information Zebulon Corp. Accounts Receivable audit. NOTE: all the information that you might need from figure 9.14 and figure 9.15 in the textbook have been provided in the table below. Round your sample size number to the next nearest whole number. For all other calculations round your result to 3 decimal places.
The A/R total book value (population) (P)	$5,250,000.00
Tolerable Misstatement (TM)	$750,000.00
Expected misstatement in the population (EM)	75,000.00
Error Expansion Factor (EEF) at 15% risk of Incorrect Acceptance (EEF)
Reliability Factor: (RF) is at the risk of incorrect acceptance at 15%
Formula Section:
Sample Interval (SI) or (I) = {TM - (EM x EEF)}/RF
Sample size (n) = Pop/I, or n = (Pop x RF)/(TM (EM x EEF))
Basic Precision = RF x SI
UML = Basic Precision + Projected Misstatements + Incremental allowance for sampling risk

Ques. 1.

1a. Calculate the Sampling Interval (SI) and Insert your answer here: ________________________

You must show your calculations here to receive full credit )

1b. Calculate the sample size (n). Assume zero misstatements found and Insert your answer here: __

Show your calculations here to receive full credit:

1c. The auditor selected the following accounts to perform the confirmation of accounts receivable procedures. Complete Column C, D, E, and F in Table B

Table B

A Book Value	B Audited Value	C Misstatement or tainting amount A-B	D Tainting Factor % (C/A)	E Sampling Interval	F = E*D1 Projected Misstatement
(top stratum) $750,000	$500,000
lower stratum $300,000	$150,000
Total	-