# Question

Assume you are planning the confirmation of accounts receivable. There are 2,000 customer accounts with a total book value of $5,643,200. Tolerable misstatement is set at $200,000, and expected misstatement is $40,000. The risk of incorrect acceptance is 30%. The ratio of expected to tolerable misstatement is 20%, and the ratio of tolerable misstatement to the population is 3.5% (round down to 3% for use in Exhibit).

a. What is the sample size?

b. What is the sampling interval?

c. What is the largest value you can use for a random start?

d. Using the following list of the first 15 items in your population a random start of $25,000, and a rounded sample interval of $100,000, identify the items to be included in your sample.

e. What is the probability of selecting each of the following population items, assuming a $100,000 sampling interval?

f. Why might the final sample size include fewer logical units than the computed samplesize?

a. What is the sample size?

b. What is the sampling interval?

c. What is the largest value you can use for a random start?

d. Using the following list of the first 15 items in your population a random start of $25,000, and a rounded sample interval of $100,000, identify the items to be included in your sample.

e. What is the probability of selecting each of the following population items, assuming a $100,000 sampling interval?

f. Why might the final sample size include fewer logical units than the computed samplesize?

## Answer to relevant Questions

Based on the information in Problem 8-56, assume that your sampling interval is $100,000.a. What is your statistical conclusion if no misstatements are found in the sample? Is the account balance acceptable? Explain.b. ...The following are typical tasks performed by GAS. For each task, provide an example of how GAS could be used to accomplish that task.a. Analyze a fileb. Select transactions based on logical identifiersc. Select samplesd. ...What is the sampling unit when gathering evidence about misstatements in account balances and associated assertions? Provide examples of sampling units in the context of accounts receivable.Refer to Exhibit. Which accounts are typically affected by transactions in the revenue cycle? Identify the relationships among them.Identify preliminary analytical procedures that can help auditors identify areas of potential material misstatements in the revenue cycle.Post your question

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