You are planning to use nonstatistical sampling to evaluate the results of accounts receivable confirmation for the Meridian Company. You have already performed tests of controls for sales, sales returns and allowances, and cash receipts, and they are considered excellent. Because of the quality of the controls, you decide to use an acceptable risk of incorrect acceptance of 10 percent. There are 3,000 accounts receivable with a gross value of $6,900,000. The accounts are similar in size and will be treated as a single stratum. An overstatement or understatement of more than $150,000 is considered material.

Requirement d. Assume a total book value of $230,000 for the 100 accounts selected for testing. You uncover three overstatements totalling $1500 in the sample. Evaluate whether the population is fairly stated. (Errors in Sample 1 Sample Book Value) Population Book Value = Overstatement Is the population fairly stated? A. No, because there should be no error in the sample. B. No, because the projected error does not provide for an allowance for sampling risk. C. Yes, because the projected error is well below the tolerable misstatement and provides for an allowance for sampling risk. D. No, because the projected error is well above the tolerable misstatement