You Are Assigned to Audit Accounts Payable for a Manufacturing

question 34

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 minimum amount of the adjustment (rounded) is:

• A) $125,000.
• B) $25,253.
• C) $157,251.
• D) $32,251.

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Definitions:

Chester Barnard

An American business executive and author known for his contributions to management theory and organizational studies, particularly in the area of cooperative systems.

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Organizational Learning

A process of creating, retaining, and transferring knowledge within an organization to improve performance and competitiveness.