Allister Is Auditing a Client's Accounts Balance Recorded at $500,000 $$\begin{array} { c c } \text { Recorded Balaree } & \text { Audited Arrount } \\\$ 4,000 & \$ 1,000 \\\$ 2,000 & \$ 1,500 \\\end{array}$$

question 54

Multiple Choice

Allister is auditing a client's accounts balance recorded at $500,000 using monetary unit sampling and determined a sample size of 100 items.The following two misstatements were identified as a result of the substantive tests:
$$\begin{array} { c c } \text { Recorded Balaree } & \text { Audited Arrount } \\\$ 4,000 & \$ 1,000 \\\$ 2,000 & \$ 1,500 \\\end{array}$$ Confidence factors for a 5 percent risk of incorrect acceptance are shown below: $$\begin{array} { c c } \text { Gverstatemert } & \text { Factor } \\\text { ETcrs } & \\0 & 3.00 \\1 & 4.75 \\2 & 6.30\end{array}$$ What is the incremental allowance for sampling risk?

• A)$3,500
• B)$5,000
• C)$8,500
• D)$15,000

---

Definitions:

Straight Voting

A method of voting in corporate elections where shareholders must assign all of their votes to one candidate for each vacancy.

Annual General Meeting

A mandatory yearly gathering of a company's interested shareholders to discuss company affairs.

Nominees

Individuals appointed or proposed to act on behalf of others in specific roles or to fulfill certain duties.

Cumulative Voting

A voting system used in elections of directors of some companies, allowing shareholders to allocate their votes in any manner they choose among the candidates.