You Are Assigned to Audit Accounts Payable for a Manufacturing

question 61

Multiple Choice

You are assigned to audit accounts payable for a manufacturing client. As part of the planning, your manager sets a tolerable misstatement amount of+/- $125,000. Your review of unpaid invoices indicates an understatement error of $25,253 from a sample of $675,467. The population value of A/P is $5,241,687 at October 31st. The lower amount of the tolerable misstatement assuming the client booked an adjusting entry for the known errors (rounded) is:

• A) $5,391,940.
• B) $5,241,687.
• C) $5,141,940.
• D) $5,266,940.

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Definitions:

Main Responsibility

The primary duty or obligation that an individual or entity is expected to fulfill.

Ocean Dumping Ban Act

A U.S. law that prohibits the dumping of material into the ocean that would unreasonably degrade or endanger human health or marine environments.

Permit System

A regulatory process requiring individuals or businesses to obtain authorization before engaging in certain activities or operations.

Ocean Waters

The vast bodies of saltwater that cover approximately 71% of the Earth's surface, comprising the five major oceans.