Assume a Mean-Per-Unit Estimation Variables Sampling Application with a Tolerable

question 50

Multiple Choice

Assume a mean-per-unit estimation variables sampling application with a tolerable misstatement of $70,000 and a book value of $700,000. After performing the sampling plan, the auditors calculated an adjusted allowance for sampling risk of $45,000 and a point estimate of the population's total audited value to be $650,000. Based on these results, the auditor would:

• A) Because the tolerable misstatement exceeds the adjusted allowance for sampling risk, conclude that the population does not contain a material misstatement.
• B) Because the total audited value ± tolerable misstatement includes the book value, conclude that the population does not contain a material misstatement.
• C) Because the tolerable misstatement exceeds the adjusted allowance for sampling risk, conclude that there is too great a risk that the account balance is materially misstated.
• D) Because the total audited value ± adjusted allowance for sampling risk does not include the book value, conclude that there is too great a risk that the account balance is materially misstated.

---

Definitions:

Premarital Pregnancy

A term referring to pregnancy that occurs before marriage.

Economic Well-Being

A condition that includes the financial security, quality of life, and ability of individuals or communities to meet their basic needs and enjoy a certain standard of living.

Emotional Health

The aspect of health that pertains to managing and understanding emotions, maintaining emotional equilibrium, and recognizing emotional responses.

Split Custody

The children are divided between the parents either by sex or the children’s choice.