Auditors Are Evaluating an Account with a Recorded Balance of $500,000

question 41

Multiple Choice

Auditors are evaluating an account with a recorded balance of $500,000 using mean-per-unit estimation.This account is comprised of 1,000 individual components.The auditors sampled 100 items and determined a total audited value of $52,500.Using a risk of incorrect acceptance of 10 percent,the auditors determined a precision of $40,000.If the tolerable misstatement is $50,000,which of the following is not true?

• A)The estimated recorded balance of this account is $525,000.
• B)A 90 percent probability exists that the true population value falls between $460,000 and $540,000.
• C)The auditors would conclude that the account balance is fairly stated.
• D)The probability that the auditors will incorrectly accept a materially misstated account balance is 10 percent.

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Definitions:

Motivational Processes

The procedures, mechanisms, or sequences of events that lead to motivated behavior, including the initiation, direction, intensity, and persistence of actions.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors, driven by internal or external factors.

Energizes

To supply with energy or increase the energy level of something, often leading to enhanced performance or activity.

Learned Responses

Behaviors developed as a result of experience or practice, often through reinforcement or conditioning.