You are preparing to audit the inventory and warehouse cycle of ABC Manufacturing and have the following information about the company and your firm's materiality guidelines: Total Revenues $25,000,000 Total Assets $18.000.000 Inventory Balance $7.500,000 Planning materiality 2% of larger of assets or revenues Overall tolerable misstatement 75% of planning materiality Individually significant items 50% of tolerable misstatement Confidence factor for sampling size 1 For purposes of physical inveritory observations and your test count selection, what sample size will you use to make selections at the warehouse?

You are preparing to audit the inventory and warehouse cycle of ABC Manufacturing and have the following information about the company and your firm's materiality guidelines: Total Revenues $25,000,000 Total Assets $18.000.000 Inventory Balance $7.500,000 Planning materiality 2% of larger of assets or revenues Overall tolerable misstatement 75% of planning materiality Individually significant items 50% of tolerable misstatement Confidence factor for sampling size 1 For purposes of physical inveritory observations and your test count selection, what sample size will you use to make selections at the warehouse?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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