The audit staff assigned to audit Maintenance Expenses totaling $4,900,000 selected a sample of transactions for substantive testing. The value of the sample selected amounted to $1,225,000 of the total balance. Errors found in the sample selected amounted to $75,000. Assuming a tolerable error limit of 5%, determine whether Maintenance Expenses are materially misstated or not.
The audit staff assigned to audit Maintenance Expenses totaling $4,900,000 selected a sample of transactions for substantive testing. The value of the sample selected amounted to $1,225,000 of the total balance. Errors found in the sample selected amounted to $75,000. Assuming a tolerable error limit of 5%, determine whether Maintenance Expenses are materially misstated or not.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The audit staff assigned to audit Maintenance Expenses totaling $4,900,000 selected a sample of
transactions for substantive testing. The value of the sample selected amounted to $1,225,000 of the total
balance. Errors found in the sample selected amounted to $75,000.
Assuming a tolerable error limit of 5%, determine whether Maintenance Expenses are materially misstated or not.
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