QUESTION 1 MONETARY UNIT SAMPLING We are going to use MUS for testing additions to property plant and equipment to audit the assertions of existence and valuation. Few, if any, misstatements are expected. Tolerable Misstatement Expected Misstatement Desired Confidence Level Total amount of additions during the year $15,000 $6,000 95% $300,000 1. What should our sample size be given the above information? (Hint: you will use the sample size tables from Ch. 8 to obtain sample size for MUS sampling): 2. Calculate the UML assuming that you identified the following misstatements in your testing: Misstatement Number Audit Value $320 1 2 0 3 2,500 Book Value $400 500 3,000 The UML is (round to the nearest dollar): 8785
QUESTION 1 MONETARY UNIT SAMPLING We are going to use MUS for testing additions to property plant and equipment to audit the assertions of existence and valuation. Few, if any, misstatements are expected. Tolerable Misstatement Expected Misstatement Desired Confidence Level Total amount of additions during the year $15,000 $6,000 95% $300,000 1. What should our sample size be given the above information? (Hint: you will use the sample size tables from Ch. 8 to obtain sample size for MUS sampling): 2. Calculate the UML assuming that you identified the following misstatements in your testing: Misstatement Number Audit Value $320 1 2 0 3 2,500 Book Value $400 500 3,000 The UML is (round to the nearest dollar): 8785
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:QUESTION 1
MONETARY UNIT SAMPLING
We are going to use MUS for testing additions to property plant and equipment to audit the assertions of existence and valuation. Few, if any,
misstatements are expected.
$15,000
$6,000
95%
$300,000
Tolerable Misstatement
Expected Misstatement
Desired Confidence Level
Total amount of additions during the year
1. What should our sample size be given the above information?(Hint: you will use the sample size tables from Ch. 8 to obtain sample size
for MUS sampling):
2. Calculate the UML assuming that you identified the following misstatements in your testing:
Misstatement Number
Book Value
Audit Value
1
$400
$320
2
500
3
3,000
2,500
The UML is (round to the nearest dollar): 8785
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