In a Monetary-Unit Sample with a Sampling Interval of $5,000,an

question 51

Multiple Choice

In a monetary-unit sample with a sampling interval of $5,000,an auditor discovers that a selected account receivable with a recorded amount of $10,000 has an audit amount of $8,000.If this were the only error discovered by the auditor,the projected misstatement for this sample would be

• A) $5,000.
• B) $4,000.
• C) $2,000.
• D) $1,000.
• Since the item sampled is greater than the sampling interval, the factual error of $2,000 is equal to the projected error.

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Definitions:

Recently Declared

Refers to a statement, dividend, or decision that has been announced or made public by a company or governing body in the near past.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, typically with fixed dividends.

Annual Return

The percentage gain or loss on an investment over a one-year period, reflecting the compound rate of return.

Dividend

A portion of a company's earnings distributed to its shareholders, typically in the form of cash or additional stock.