The auditors wish to test the valuation of accounts receivable in the audit of Kaplan Corporation. The client has $1,000,000 of total recorded receivables, composed of 2,280 accounts. Use Figure 9-13 to determine the reliability factor. The auditors have decided to use structured nonstatistical sampling and have determined the following: Tolerable misstatement Assessment of inherent and control risk Risk related to other substantive procedures $50,000 Moderate Moderate Required: a. Calculate the required sample size. (Roundup to the next whole number.) Sample size b. Assume that the auditors have tested the sample and discovered the following three misstatements. The remainder of the sample had an average value (book and audited) of $549.00. Use the ratio estimation method to calculate the projected misstatement of the population. (Do not round any division. Round your final answer to the nearest dollar amount.) Book Value $102 585 945 Audited Value $110 664 468 Projected misstatement FIGURE 9.13 Reliability Factors for Nonstatistical Sampling Plan Risk That Other Substantive Procedures (e.g., Analytical Procedures) Will Fail to Detect a Material Misstatement Low Maximum 3.0 1.9 Combined Assessment of Inherent and Control Risk Maximum Slightly below maximum Moderate Low Moderate 2.3 2.0 1.6 2.7 1.6 2.3 1.2 1.9 1.2 1.0 Note: This table is applicable when the auditors expect few misstatements in the population