The following information relates to a nonstatistical sample used for a price test of inventory: a. What

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The following information relates to a nonstatistical sample used for a price test of inventory:

a. What is the best estimate of the total misstatement?
b. Are these results acceptable, assuming tolerable misstatement is $25,000? Explain.
c. If the results are not acceptable, what possible courses of action can the auditortake?

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Auditing a risk based approach to conducting a quality audit

ISBN: 978-1133939153

9th edition

Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg

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Question Posted: Sep 22, 2014 08:23 AM

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The following information relates to a nonstatistical sample used for a price test of inventory: a. What

Question:

Population Sample Number Amun Number Amount Misstatement >$30,000 20 1,600,000 20 $1,600,000 $1,000 $30,000 200 $1,500,000 20 $185,000 $600 Total 220 $3,100,000 40 $2785,000 $1,600

Step by Step Answer:

a Lower stratum projected misstatement 600185000 1500000 486486 Plus topstratum misstatement 100000 Total projected misstatement 586486 b Tolerable misstatement has been set at 25000 so the projected ...View the full answer

Auditing a risk based approach to conducting a quality audit

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