In a Monetary-Unit Sample with a Sampling Interval of $10,000,an

question 44

Multiple Choice

In a monetary-unit sample with a sampling interval of $10,000,an auditor discovered that a selected account receivable with a recorded amount of $5,000 had an audit amount of $2,000.The projected misstatement of this sample was

• A) $3,000.
• B) $4,000.
• C) $6,000.
• D) $8,000.
• The misstatement amount is 60% with a taint of .60 of the book value of the selected item. The taint is applied to the sampling interval to determine the projected misstatement for the account. The projected misstatement would be $6,000 ($10,000 × .60).

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Definitions:

Book Value

The net value of a company's assets, subtracting the total liabilities from the total assets, often used to assess a company's financial health.

Net Present Value

This represents the discrepancy between what cash comes in at its current value and what cash goes out at its current value over an allocated period.

Market Value Per Share

The current price at which a company's stock is trading on the open market.

Equipment

Tangible assets used in operations, such as machinery or tools, which play a crucial role in the production or service process.