Solo,CPA,performed a Nonstatistical Sampling Plan to Examine the Inventory Balances

question 104

Multiple Choice

Solo,CPA,performed a nonstatistical sampling plan to examine the inventory balances of Hope Inc.,and estimated the account balance by projecting the misstatement based on the number of items examined.In selecting her sample of 70 items,she used an expected misstatement of $40,000 and a tolerable misstatement of $65,000.The account balance consisted of 1,050 items totaling $1,200,000.The sample recorded value was $80,000,and the audited value was $76,000.What conclusion did Solo draw regarding the account balance?

• A) Accept because the expected misstatement is less than the tolerable misstatement
• B) Reject because the expected misstatement is greater than the expected misstatement
• C) Accept because the expected misstatement is less than the expected misstatement
• D) Reject because the expected misstatement is greater than the tolerable misstatement

Grasp the principles of the Capital Asset Pricing Model (CAPM) and its implications on expected returns.

Understand the nature of diversified and non-diversified risk in portfolio management.

Learn the significance of beta as a measure of systematic risk in portfolios.

Measure the implications of different risk factors (systematic and unsystematic) on securities and portfolios.