If the Projected Misstatement in a Nonstatistical Sampling Is $8,000,while

question 79

Multiple Choice

If the projected misstatement in a nonstatistical sampling is $8,000,while the tolerable misstatement is $9,000,what would an auditor likely conclude?

• A)Since the projected misstatement is less than the tolerable misstatement,the account is not misstated.
• B)Since the projected misstatement is less than the tolerable misstatement,the account is misstated.
• C)The risk is high that the account is materially misstated.
• D)The analysis has been improperly performed since the projected misstatement is unequal to the tolerable misstatement.

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Definitions:

Computed

Refers to something that has been determined or calculated using a computer or calculator.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment or project, calculated by discounting the expected future cash flows to their present values and subtracting the initial investment.

Present Value

The immediate value of a future amount of money or a series of payments, discounted at a given rate of return.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods.