Section B Only.

You are the auditor of Jexel, an auto air-conditioner service and repair company, and you have decided to use the mean-per-unit method to test the existence and gross valuation of recorded accounts receivable. The client's records include 9,600 accounts with a total book value of $1.270.000. You decide to use tolerable misstatement of $217,000, an incorrect acceptance risk of 20 percent, and an incorrect rejection risk of 15.0 percent. Using Excel, you estimated the standard deviation of the population as $34. Use Figure 9-8 to obtain the incorrect acceptance and rejection coefficients. Required: a. Determine the sample size. b. Assume you tested the sample and got the following results: The mean audited value of the accounts sampled was $131. Assuming that the standard deviation of the sample's audited value is also $34, what is the projected misstatement for the population? c. Assuming that the standard deviation of the sample's audited value is $29, what is the projected misstatement for the population? Required A Required B Required C Assume you tested the sample and got the following results: The mean audited value of the accounts sampled was $122. Assuming that the standard deviation of the sample's audited value is also $25, what is the projected misstatement for the population? What is the confidence interval? Is the account materially misstated? Projected miststatement Confidence Interval Materially misstated? Will you accept the account?