An auditor had decided to use probability-proportional-to-size (PPS) sampling, also called dollar-unit or cumulative monetary unit (CMU) sampling, in the audit of the client’s accounts receivable balance. The auditor discovered 3 misstatements while doing their testing. Complete the spreadsheet below and calculate the total projected misstatement.
An auditor had decided to use probability-proportional-to-size (PPS) sampling, also called dollar-unit or cumulative monetary unit (CMU) sampling, in the audit of the client’s accounts receivable balance. The auditor discovered 3 misstatements while doing their testing. Complete the spreadsheet below and calculate the total projected misstatement.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An auditor had decided to use probability-proportional-to-
Transcribed Image Text:Recorded
amount
1st misstatement
$400
2nd misstatement 500
3rd misstatement 3,000
Total
Audit amount Sampling
Interval
$1,000
1,000
1,000
$320
0
2,500
Difference Tainting Projected misstatement (interval x
%
tainting %)
0%
0%
0%
0
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