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

question 49

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 balance 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.

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Definitions:

Peripartum Depression

A type of mood disorder associated with childbirth, encompassing depression that occurs during pregnancy or within the weeks or months after delivery.

"Baby Blues"

A common condition that typically affects new mothers, characterized by temporary sadness, anxiety, and mood swings shortly after childbirth.

Serotonin

A neurotransmitter involved in regulating mood, appetite, sleep, memory, and learning.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, affecting attention and responding actions.