Answered step by step
Verified Expert Solution
Question
1 Approved Answer
17-29 (OBJECTIVE 17-3) In the audit of Price Seed Company for the year ended September 30, the auditor set a tolerable misstatement of $50,000 at
17-29 (OBJECTIVE 17-3) In the audit of Price Seed Company for the year ended September 30, the auditor set a tolerable misstatement of $50,000 at an ARIA of 10 percent. A PPS sample of 100 was selected from an accounts receivable population that had a recorded balance of $1,975,000. The following table shows the differences uncovered in the confirmation process: Accounts Receivable per Records $2.728.00 2 $5,125.00 { $3.890.00 $815.00 i $548.00 -O- Accounts Receivable per Confirmation Follow-Up Comments by Auditor $2,498.00 Pricing error on two invoices. -0- Customer mailed check September 26;company received check October 3. $1,190.00 Merchandise returned September 30 and counted in inventory; credit was issued October 6. $ 785.00 Footing error on an invoice. Goods were shipped September 28; customer re- ceived goods on October 2; sale was recorded on September 28. $3,190.00 Pricing error on a credit memorandum. -O Goods were shipped on September 29; customer received goods October 3; sale was recorded on September 30. Calculate the upper misstatement bound on the basis of the client misstatements in the sample. b. Is the population acceptable as stated? If not, what options are available to the auditor at this point? Which option should the auditor select? Explain. 6. $3,215.00 7. $1,540.00 Re 17.30
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started