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

question 49

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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?

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Definitions:

Modeling Techniques

A range of methods or strategies used to represent, simulate, or analyze complex systems or processes.

Emotional Reactions

Responses characterized by intense feelings that arise from stimuli or situations.

Psychoanalysis

A therapeutic approach developed by Sigmund Freud, focusing on unconscious psychological processes and is often used to treat psychopathology.

Behavior Modification

A therapeutic approach that seeks to change potentially self-destructive or unhealthy behaviors through reinforcement methods.

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