You are the auditor of Jexel, an auto air-conditioner service and repair company, and you have decided to use the mean-per-unit method to test the existence and gross valuation of recorded accounts receivable. The clients records include 9,600 accounts with a total book value of $1,345,000. You decide to use tolerable misstatement of $232,000, an incorrect acceptance risk of 5 percent, and an incorrect rejection risk of 1.0 percent. Using Excel, you estimated the standard deviation of the population as $26. Use Figure 9-8 to obtain the incorrect acceptance and rejection coefficients.

Required:

a. Determine the sample size.

b. Assume you tested the sample and got the following results: The mean audited value of the accounts sampled was $131. Assuming that the standard deviation of the samples audited value is also $26, what is the projected misstatement for the population?

c. Assuming that the standard deviation of the samples audited value is $21, what is the projected misstatement for the population?

Required A Required B Required C Determine the sample size. (Roundup to the next whole number.) Sample size Required A Required B Required C Assuming that the standard deviation of the sample's audited value is $20, what is the projected misstatement for the population? Projected miststatement Confidence Interval Materially misstated? Will you accept the account?