The Audit Team Is Using Monetary Unit Sampling to Examine

question 56

Multiple Choice

The audit team is using monetary unit sampling to examine an entity's accounts receivable balance,which is recorded at $500,000.The team has determined the tolerable misstatement to be $25,000,the risk of incorrect acceptance to be 5 percent,and the expected misstatement to be 2 percent.Using the monetary unit sampling Sample Size table,what is the appropriate sample size?

• A)75
• B)162
• C)231
• D)300

---

Definitions:

International Financial Reporting Standards

A set of accounting standards developed by the International Accounting Standards Board (IASB) that aims to standardize accounting practices globally.

Accounting Standards for Private Enterprises

Specific accounting principles and guidelines meant for the financial reporting of privately-held companies, differing from those for publicly traded companies.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and adjusted thereafter for the investor's share of the investee’s profits or losses.

Journal Entries

Records of financial transactions in the accounting system.