Zimmerman Is Auditing a Client's Accounts Balance Recorded at $1

question 84

Multiple Choice

Zimmerman is auditing a client's accounts balance recorded at $1 million using monetary unit sampling.After assessing the appropriate parameters,Zimmerman determined an appropriate sample size of 100 items.The following two misstatements were identified as a result of the substantive tests: Assume that Zimmerman's parameters included a tolerable misstatement of $60,000 and a risk of incorrect acceptance of 5%.(Confidence factors for a 5% risk of incorrect acceptance are shown below) : Which of the following is not true with respect to the above?

• A) The actual misstatement detected by Zimmerman is $6,500.
• B) The projected misstatement is $7,000.
• C) The basic allowance for sampling risk is $30,000.
• D) If the upper limit on misstatements is $46,750, Zimmerman should accept the account balance as fairly stated.

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