You Are Planning to Use Monetary Unit Sampling to Evaluate

question 44

Essay

You are planning to use monetary unit sampling to evaluate accounts receivable for Rose Company.The accounts receivable account totals $4,000,000.You have assessed a risk of incorrect acceptance of 10 percent,a tolerable misstatement of $200,000,and an expected misstatement of $40,000.
a.Calculate the sample size and sampling interval.
b.Regardless of your answer to (a),use a sample size of 66 and the related sampling interval to calculate the upper limit on misstatements assuming you found the following differences. $$\begin{array} { c c c c } \text { Account } & \text { Recorded } & \ \text { Aldited } & \text { Difference } \\&\text { Balance} & \text { Value} \\201 & \$ 1,000 & \$ 20 & \$ 200 \\532 & 2,000 & 600 & 1,400\end{array}$$

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Definitions:

Stramenopiles

A diverse group of eukaryotic organisms, including diatoms, brown algae, and water molds, characterized by the presence of fine, hairlike projections on their flagella.

Paramecium

A genus of unicellular ciliates, commonly studied as a representative of the ciliate group, known for their ability to move using tiny hair-like structures called cilia.

Alveolates

A group of protozoans, including dinoflagellates, apicomplexans, and ciliates, characterized by the presence of alveoli structures beneath their cell membranes.

Cellular Slime Mold

Amoeba-like protist that feeds as a single predatory cell; joins with others to form a multicellular spore-bearing structure under unfavorable conditions.