Practice calculating the sample size and the number of expected errors in attributes sampling by using the tables in Exhibit and the following combinations ofinputs:
Answer to relevant QuestionsUsing the tables in Exhibit, work backward to explain at least one set of assumptions that the auditor would have to make to justify the following samplesizes:Define the following terms: (a) Misstatement, (b) Factual misstatement, (c) Projected misstatement, (d) Tolerable misstatement, (e) Expected misstatement.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. ...Define the terms sampling units and population, and describe how these two concepts relate to each other.TRUE-FALSE QUESTIONS1. The auditor might believe a heightened risk of fraud exists if the preliminary analytical procedures indicate increases in revenue and net income, but negative cash flow from operations.2. When ...
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