Auditing: A Risk Based-Approach (MindTap Course List)
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN: 9781337619455
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
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Chapter 8, Problem 31RQSC

A

To determine

Introduction: Sample size is the basic unit of the audit to collect the data and sampling interval is the ratio of the population to the sample size.

Requirement 1

To calculate : The sample size and sampling interval.

B

To determine

Introduction: Misstatement is an error part in the transaction area.

Requirement 2

Analyze each difference detection, if there is misstatement or not.

C

To determine

Introduction: Misstatement is defined as the difference between presentation, final amount and classification. The total estimated misstatement is the balance of the account.

Requirement 3

To calculate : Total estimated misstatement of the audit.

D

To determine

Introduction:Misstatement is defined as the difference between presentation, final amount and classification. The total estimated misstatement is the balance of the account.

Requirement 4

Discuss the nature of the auditing procedures.

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Students have asked these similar questions
The financial records of the Movitz Company show that R. Dennis owes $4,100 on an account receivable. An independent audit is being carried out, and the auditors send a positive confirmation to R. Dennis. What is the most likely reason as to why a positive confirmation rather than a negative confirmation was used here?a. Control risk was particularly low for accounts receivable.b. Inherent risk was particularly high for accounts receivable.c. Dennis’s account was not yet due.d. Dennis’s account was not with a related party.
You are auditing the accounts receivable for Conor Company as of December 31, 2021.  One of your procedures was to send positive confirmations to a sample of 50 accounts.  Of those 50 confirmations, 40 have been positively confirmed without comments, 7 had minor differences that have been cleared satisfactorily.  Two of the responses  had the following comments: a.  “We never received these goods.” b.  “The balance of $1,000 was paid on December 15, 2021.” For each of these comments, identify the steps that you would take to clear (resolve) them.
In the audit of Checkers, Inc., a nonissuer, the auditor was assigned to a test of cash disbursements. The auditor randomly selected a sample of 75 items out of the 1,500 disbursements made. After completing the test procedures, the auditor determined that the sample contained several misstatements totaling $4,500. All of these were overstatements. The auditor then computed a projected misstatement of $90,000 $24,500 $337,500 $112,500 0000

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

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