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.

---

Definitions:

Innovative Projects

Initiatives that introduce new ideas, methods, or products.

Counterproductive Projects

Projects or initiatives that have the opposite of the intended effect, often causing more harm than good.

Capital Markets

Financial markets where long-term debt or equity-backed securities are bought and sold, facilitating investment and growth.