Monetary Unit Sampling Misstatement Factors for Sample Evaluation TABLE 9-3 90% Desired Confidence Level 95% Desired Confidence Level Incremental Number of Misstatements Misstatement Factor Misstatement Factor Incremental Increase Increase 3.0 2.3 3.9 5.3 6.6 7.9 9.1 10.3 1.6 1.4 1.3 1.3 1.2 1.2 4.7 6.2 7.6 9.0 10.3 11.5 1.7 1.5 1.4 1.4 1.3 1.2 4 123 456
Monetary Unit Sampling Misstatement Factors for Sample Evaluation TABLE 9-3 90% Desired Confidence Level 95% Desired Confidence Level Incremental Number of Misstatements Misstatement Factor Misstatement Factor Incremental Increase Increase 3.0 2.3 3.9 5.3 6.6 7.9 9.1 10.3 1.6 1.4 1.3 1.3 1.2 1.2 4.7 6.2 7.6 9.0 10.3 11.5 1.7 1.5 1.4 1.4 1.3 1.2 4 123 456
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Calculate the UML using Table 9-3 assuming that the following three misstatements were discovered in testing based on the MUS sample computed in part (b).Do not round intermediate calculations. Round your answer to the nearest dollar amount.
| Misstatement Number | Book Value | Audit Value | |||
| 1 | $ | 400 | $ | 320 | |
| 2 | 500 | 0 | |||
| 3 | 3,000 | 2,500 | |||
|
|
Transcribed Image Text:**Table 9-3: Monetary Unit Sampling Misstatement Factors for Sample Evaluation**
This table presents the misstatement factors utilized in Monetary Unit Sampling (MUS) for determining sample evaluation. The table provides data for both a 90% Desired Confidence Level and a 95% Desired Confidence Level, essential in auditing and statistical sampling.
### Breakdown:
**Number of Misstatements:**
- This column lists the number of misstatements identified within the sample.
**90% Desired Confidence Level:**
- **Misstatement Factor:** It provides a numerical value that represents the factor used to calculate the misstatement amount for the sample.
- **Incremental Increase:** This shows the incremental rate at which the misstatement factor increases as the number of misstatements increases.
**95% Desired Confidence Level:**
- **Misstatement Factor:** This represents the factor for calculating the misstatement amount at a 95% confidence level, offering a higher confidence compared to the 90% level.
- **Incremental Increase:** This indicates the incremental rise in the misstatement factor corresponding to an increasing number of misstatements.
### Detailed Values:
| Number of Misstatements | 90% Desired Confidence Level | 95% Desired Confidence Level |
|-------------------------|---------------------------------------|---------------------------------------|
| | Misstatement Factor | Incremental Increase | Misstatement Factor | Incremental Increase |
| 0 | 2.3 | 1.6 | 3.0 | 1.7 |
| 1 | 3.9 | 1.4 | 4.7 | 1.5 |
| 2 | 5.3 | 1.4 | 6.2 | 1.5 |
| 3 | 6.6 | 1.3 | 7.6 | 1.4 |
| 4 | 7.9 | 1.3 | 9.0 | 1.4 |
| 5 | 9.1 | 1.2 | 10.3 | 1.3 |
| 6 | 10.3 | 1.2 | 11.5 | 1.2 |
### Explanation:
- **Misstatement Factor:** As the number of misstatements
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education