Edwards has decided to use monetary unit sampling in the audit of a client’s accounts receivable balance. Few, if any, misstatements of account balance overstatement are expected.
| Required: |
| b. |
Calculate the sample size and the sampling interval using Table 8 5, Edwards should use for the following information: (Use the tables, not ACL, to solve for these problems. Round your interval answers to the nearest dollar amount. Omit the “$” sign in yourresponse.) |
| Tolerable misstatement | $ | 15,000 | |
| Expected misstatement | $ | 6,000 | |
| Desired confidence level | 95 | % | |
| Recorded amount of accounts receivable | $ | 300,000 | |
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| Using table 8 5 | |
| Sample size | |
| Sampling interval | $ |
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| c. |
Calculate the UML assuming that the following three misstatements were discovered in an MUS sample using Table 8 5, Table 9 3. (Use the tables, not ACL, to solve for these problems.Do not round intermediate calculations. Round your answers to the nearest dollar amount. Omit the “$” sign in your response.) |
| Misstatement Number | Book Value | Audit Value | |||
| 1 | $ | 400 | $ | 320 | |
| 2 | 500 | 0 | |||
| 3 | 3,000 | 2,500 | |||
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| UML using the table 8 5 | $ |