Assume Several Auditors Selected Various Unrestricted, Unstratified Random Samples from a Population

question 7

Essay

Assume several auditors selected various unrestricted, unstratified random samples from a population of 1,200 customers' accounts receivable with a recorded value of $480,000. The results of their tests are shown in the table below.
Projected Likely Misstatement
Overstatement (Understatement)
Required:
For each of the sample sizes, calculate the projected likely misstatement (PLM) using (1) average difference method, and (2) the Dollar Unit Sample method. Treat each case independently. Round the PLM solutions to the nearest dollar.

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Definitions:

Benign Tumors

Noncancerous growths in the body that are generally not life-threatening and do not spread to other parts.

Muscle Cells

Specialized cells that make up muscle tissue, capable of contracting and relaxing to produce movement.

Uterus

A hollow, pear-shaped organ in a female's lower abdomen where offspring are conceived and in which they gestate before birth; the womb.

Menorrhagia

Excessive or prolonged menstrual bleeding at regular menstrual cycle intervals.