Zimmerman Is Auditing a Client's Accounts Balance Recorded at $1 $$\begin{array} { c c } \text { Recorded Balarice } & \text { Audited Value } \\\$ 20,000 & \$ 16,000 \\\$ 5,000 & \$ 2,000\end{array}$$

question 35

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: $$\begin{array} { c c } \text { Recorded Balarice } & \text { Audited Value } \\\$ 20,000 & \$ 16,000 \\\$ 5,000 & \$ 2,000\end{array}$$ Assume that Zimmerman's parameters included a tolerable misstatement of $60,000 and a risk of incorrect acceptance of 5 percent.(Confidence factors for a 5 percent risk of incorrect acceptance are shown below) : $$\begin{array} { c c } \text { Gverstatemert } & \text { Factor } \\\text { ETcrs } & \\0 & 3.00 \\1 & 4.75 \\2 & 6.30\end{array}$$ 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.

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Definitions:

Daily Functioning

Refers to an individual's ability to perform essential activities required for day-to-day living, such as bathing, dressing, eating, and managing tasks.

Catatonic Schizophrenia

A subtype of schizophrenia characterized by abnormal motor behavior, which can range from a complete lack of movement to erratic and uncontrolled movements.

Total Inactivity

A state or condition in which there is a complete absence of movement or action.

Americans

Residents or citizens of the United States of America, characterized by a diverse set of cultural, linguistic, and historical attributes.