Assume a Mean-Per-Unit Estimation Variables Sampling Application with a Tolerable

question 81

Multiple Choice

Assume a mean-per-unit estimation variables sampling application with a tolerable misstatement of $70,000 and a book value of $700,000.After performing the sampling plan,the auditors calculated an allowance for sampling risk of $45,000 and a point estimate of the population's total audited value to be $650,000.Based on these results,the auditor would:

• A)Conclude that the population does not contain a material misstatement,because the tolerable misstatement exceeds the allowance for sampling risk.
• B)Conclude that the population does not contain a material misstatement,because the total audit value plus or minus tolerable misstatement includes the book value.
• C)Conclude that there is too great a risk that the account balance is materially misstated,because the tolerable misstatement exceeds to the projected misstatement.
• D)Conclude that there is too great a risk that the account balance is materially misstated,because one limit of the interval calculated by projected misstatement + or - allowance for sampling risk exceeds the tolerable misstatement.

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