The book value of accounts receivable is $17,483,955, tolerable misstatement is $855,000, you specify a 95% confidence level, and the expected amount of misstatement is $98,000. You determine that the appropriate sample size is 78 and thus the sample interval is $151,105.

i) Assume that your team has collected the sample and evaluated each sample item. Your team has identified the following customer accounts with differences between their book and audit value. Compute the tainting factor, if any, for each of these accounts.

ii) Given your computations in Part i, compute the projected misstatement for each of the four misstated accounts.

iii) Given the projected misstatements computed in Part ii, compute the upper misstatement limit. State whether you believe the account is fairly stated.

I AM NOT JUST LOOKING FOR THE ANSWER, I WOULD LIKE SOMEBODY TO PLEASE EXPLAIN THE PROCESS OF HOW THE ANSWER IS DERIVED AS WELL AS ALL NUMBERS AND COMPUTATIONS PLEASE

FIGURE 9.14 Reliability Factors for Misstatements of Overstatement Risk of Incorrect Acceptance Number of Overstatement Misstatements 1% 5% 10% 15% 20% 25% 30% 37% 50% 4.61 6.64 8.41 10.05 11.61 13.11 14.57 16.00 17.41 18.79 20.15 3.00 4.75 6.30 7.76 9.16 10.52 11.85 13.15 14.44 15.71 16.97 2.31 3.89 5.33 6.69 8.00 9.28 10.54 11.78 13.00 14.21 15.41 1.90 3.38 4.72 6.02 7.27 8.50 9.71 10.90 12.08 13.25 14.42 1.61 3.00 4.28 5.52 6.73 7.91 9.08 10.24 11.38 12.52 13.66 1.39 2.70 3.93 5.11 6.28 7.43 8.56 9.69 10.81 11.92 13.02 2.44 3.62 4.77 5.90 7.01 8.12 9.21 10.31 11.39 12.47 1.00 2.14 3.25 4.34 5.43 6.49 7.56 8.63 9.68 10.74 11.79 0.70 1.68 2.68 3.68 4.68 5.68 6.67 7.67 8.67 9.67 10.67 * The O row is always used for the reliability factor in the sample size formula and for basic precision. Difference Tainting Factor Audit Value $ 16,500.00 Customer Simpson Griffin Smith Fry Book Value $ 23,000.00 $ 12,000.00 $ 149,800.00 $ 162,055.00 $ 115,500.00 $ 148,000.00 Sampling Interval Tainting Factor Projected Misstatement Customer Simpson Griffin Smith Fry Sampling Interval Projected Misstatement Tainting Factor 1.0 Upper Misstatement Customer Basic Precision Increment Upper Misstatement Limit FIGURE 9.14 Reliability Factors for Misstatements of Overstatement Risk of Incorrect Acceptance Number of Overstatement Misstatements 1% 5% 10% 15% 20% 25% 30% 37% 50% 4.61 6.64 8.41 10.05 11.61 13.11 14.57 16.00 17.41 18.79 20.15 3.00 4.75 6.30 7.76 9.16 10.52 11.85 13.15 14.44 15.71 16.97 2.31 3.89 5.33 6.69 8.00 9.28 10.54 11.78 13.00 14.21 15.41 1.90 3.38 4.72 6.02 7.27 8.50 9.71 10.90 12.08 13.25 14.42 1.61 3.00 4.28 5.52 6.73 7.91 9.08 10.24 11.38 12.52 13.66 1.39 2.70 3.93 5.11 6.28 7.43 8.56 9.69 10.81 11.92 13.02 2.44 3.62 4.77 5.90 7.01 8.12 9.21 10.31 11.39 12.47 1.00 2.14 3.25 4.34 5.43 6.49 7.56 8.63 9.68 10.74 11.79 0.70 1.68 2.68 3.68 4.68 5.68 6.67 7.67 8.67 9.67 10.67 * The O row is always used for the reliability factor in the sample size formula and for basic precision. Difference Tainting Factor Audit Value $ 16,500.00 Customer Simpson Griffin Smith Fry Book Value $ 23,000.00 $ 12,000.00 $ 149,800.00 $ 162,055.00 $ 115,500.00 $ 148,000.00 Sampling Interval Tainting Factor Projected Misstatement Customer Simpson Griffin Smith Fry Sampling Interval Projected Misstatement Tainting Factor 1.0 Upper Misstatement Customer Basic Precision Increment Upper Misstatement Limit