Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are the auditor of Unet Incorporated, an auto air-conditioner service and repair company, and you have decided to use the mean-per-unit method to test

You are the auditor of Unet Incorporated, 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 14,000 accounts with a total book value of $3,492,000. You decide to use tolerable misstatement of $182,000, an incorrect acceptance risk of 5 percent, and an incorrect rejection risk of 4.6 percent. Using Excel, you estimated the standard deviation of the population as $116. Required: a. Determine the sample size. b1. The mean audited value of the accounts in the sample was $244. Assuming that the standard deviation of the samples audited value is also $116, what is the projected misstatement for the population? b2. Will you accept this account as not being materially misstated? c1. Assuming that the standard deviation of the samples audited value is $244, what is the projected misstatement for the population? c2. Will you accept this account as not being materially misstated?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Coping With Financial Accounting 1 For Senior Secondary Schools And Undergraduate Studies

Authors: Festus Chukwunwendu Akpotohwo ,Stella Alfred-Jaja Wellington-Igonibo ,Cletus Ogeibiri

1st Edition

3659611034, 978-3659611032

More Books

Students also viewed these Accounting questions