MES Is Auditing a Client's Accounts Receivable Balance Recorded at $2

question 36

Multiple Choice

MES is auditing a client's accounts receivable balance recorded at $2 million using MUS.The following parameters have been established for this account: -Tolerable misstatement = $200,000
-Expected misstatement = $100,000
-Risk of incorrect acceptance = 5 percent
Which of the following statements would not be true with respect to the sample size in this situation?

• A)The correct sample size is 116 customer accounts.
• B)Increasing tolerable misstatement from $200,000 to $600,000 (holding all other factors constant)will increase the sample size.
• C)If MES can accept a risk of incorrect acceptance of 10 percent (holding all other factors constant),sample size will be decreased to 80 accounts.
• D)Because the size of the population is relatively large,this element does not affect sample size.

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Definitions:

Classical Conditioning

A fundamental learning technique established by the association between an initially neutral stimulus and a naturally occurring stimulus, leading to a learned response.

Acquisition

In psychology, the initial stage of learning or conditioning during which a response is established.

Extinction

In psychology, the gradual weakening and eventual disappearance of a conditioned response.

Spontaneous Recovery

The reappearance of a previously extinguished response after a period of non-exposure to the conditioned stimulus.