The following information is provided for the audit of Vial-tech. Performance materiality is twice theamount of materiality. There are no other misstatements other than those indicated.AccountAccounts receivableInventoryFixed assetsAll other accounts (net)Net assets$5,000$20,000$25,000Amount$45,0001,000,0002,500,0002,000,0001,500,0007,000,000PerformanceMaterialityAmount includes projected misstatement and allowance for sampling risk:In testing accounts receivable, the auditor tested $200,000 of receivables and found $5,000 ofmisstatements. The direct projected misstatement in accounts receivable excluding sampling risk is:O Insufficient information to determine.40,00060,00010,00040,000150,000EstimatedMisstatementsOverstatingIncome45,00010,0005,0005,000

Accounts receivable indicates the amounts which company has not received from their debtors to whom…

Answered: The following information is provided…

The following information is provided for the audit of Vial-tech. Performance materiality is twice the amount of materiality. There are no other misstatements other than those indicated.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter11: Auditing Inventory, Goods And Services, And Accounts Payable: The Acquisition And Payment Cycle

Section: Chapter Questions

Problem 23RQSC

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