The following decisions about the audit of inventory for ABC Inc. have been determined by the partner-in-charge:

Total recorded value	$1,200,000
Materiality	$100,000
Sample size	60
Average percent of error assumption - overstatements	50%
Average percent of error assumption - understatements	50%
Acceptable risk of incorrect acceptance	10%

what are the adjusted overstatement and understatement bounds?

Number of Misstatements	Misstatement Unit Error Assumption	Sample Size	Recorded Population	Point Estimate	Bounds
Initial overstatement bound
Understatement misstatements
1		60	1,200,000
2		50	1,200,000
Sum
Adjusted overstatement bound				5 marks

Number of Misstatements	Misstatement Unit Error Assumption	Sample Size	Recorded Population	Point Estimate	Bounds
Initial understatement bound
Overstatement misstatements
1		50	1,200,000
2		50	1,200,000
3		50	1,200,000
Sum
Adjusted understatement bound