Rome,CPA Is Conducting a Classical Variables Sampling Application on a Client's

question 17

Essay

Rome,CPA is conducting a classical variables sampling application on a client's accounts receivable recorded at $3,000,000.These receivables are comprised of 5,000 customer accounts.Assume that Rome identified an acceptable level of the risk of incorrect acceptance of 5 percent,determined a sample size of 100,and confirmed the accounts with the client's customers.Rome's substantive procedures indicated that the average audited value was $590 per account.
a.Determine the sample estimate of the client's accounts receivable.
b.If the standard deviation of sample estimates is $30,calculate the precision.
c.Calculate the precision interval.

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Definitions:

Market Share

The portion of a market controlled by a particular company or product.

Perceived Market

The segment of a market that consumers are aware of or have a particular perception about, which may influence their purchasing decisions.

Pareto Efficient

A scenario in which it is impossible to improve the status of any individual or preference without adversely affecting at least one other individual or preference.

Negative Externalities

Costs suffered by a third party as a result of an economic transaction in which they were not involved, such as pollution.