Question: Assume that you are auditing the inventory of Husky Manufacturing

Assume that you are auditing the inventory of Husky Manufacturing Company for the year ended December 31, 2013, and you are using MUS. The book value is $8,124,998.66. The risk of incorrect acceptance is 10% (90% confidence level). The tolerable misstatement is $275,000, and expected misstatement is $80,000, so the ratio of expected misstatement to tolerable misstatement is 29%. The ratio of tolerable misstatement to the population book value is 4.3%.
a. Calculate the sample size and the sampling interval.
b. Calculate the total estimated misstatement assuming the following misstatements were found in the sample:
Book Value Audit Value
$41,906.45 ....... $36,906.45
$335,643.28 ....... $333,643.28
What conclusion do you reach based upon your calculation?


View Solution:


Sale on SolutionInn
Sales9
Views454
Comments
  • CreatedSeptember 22, 2014
  • Files Included
Post your question
5000