Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The auditors wish to test the valuation of accounts receivable in the audit of Kaplan Corporation. The client has $1,015,000 of total recorded receivables, composed

image text in transcribed

The auditors wish to test the valuation of accounts receivable in the audit of Kaplan Corporation. The client has $1,015,000 of total recorded receivables, composed of 1,940 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 $58,000 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 $514.00. 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 $82 500 860 Audited Value $89 584 552 Projected misstatement c. Use the results obtained in (b) to come to a conclusion about whether to "accept" or "reject the population. O Accept O Reiect

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Integrated Audit Practice Case

Authors: David S. Kerr, Randal J. Elder, Alvin A. Arens

7th Edition

0912503688, 978-0912503684

More Books

Students also viewed these Accounting questions

Question

Identify and briefly describe the different types of brands.

Answered: 1 week ago