Which of the Following Factors Would Not Result in a Reduced

question 104

Multiple Choice

Which of the following factors would not result in a reduced sample size in monetary unit sampling?

• A) An increase in the risk of incorrect acceptance from 5 percent to 10 percent.
• B) A decrease in the expected misstatement from $5,000 to $3,000.
• C) A decrease in the tolerable misstatement from $15,000 to $10,000.
• D) A decrease in the recorded balance from $200,000 to $185,000.

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Definitions:

Net Income

The amount of profit left over after all expenses, taxes, and costs have been subtracted from total revenue.

Retained Earnings

The part of net earnings a corporation keeps instead of paying out to its shareholders in the form of dividends.

Noncumulative

A term often used to describe preferred stocks or dividends that do not accumulate if they are unpaid or not declared.

Nonparticipating

Describing a type of insurance policy or preferred stock where the holder is not entitled to share in the company's profits beyond a specified amount.