Concept explainers
Smith, Inc.
Rachel Robertson wishes to use mean-per-unit sampling to evaluate the reasonableness of the book value of the
Required:
- a. Calculate the required
sample size . - b. Assuming the following results:
Book value of items in sample = $149
Average audited value of items in sample = $146
Standard deviation of sample = $28
use the mean-per-unit method to:
- (1) Calculate the point estimate of the account’s audited value.
- (2) Calculate the projected misstatement for the population.
- (3) Calculate the adjusted allowance for sampling risk.
- (4) State the auditors’ conclusion in this situation (accept or reject).
Use the following replies for the above questions—replies may be used once, more than once, or not at all. In all cases, select the reply closest to your answer.
Want to see the full answer?
Check out a sample textbook solutionChapter 9 Solutions
Principles Of Auditing & Other Assurance Services
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage LearningAuditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College PubEssentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning