Assume your audit objective is to estimate the upper error limit for an audit population and, therefore, you select probability-proportional-to-size (PPS) sampling. From prior year working papers and evidence accumulated during the consideration of internal control, you conclude that errors are expected and that the risk of incorrect acceptance is .10.

The following information is also known:

After testing logical units, three differences are observed as follows:

Required: 

From this information, determine the following:
1. The reliability factor for overstatement errors.
2. The expansion factor.
3. Sample size.
4. The sampling interval.
5. Basic precision.
6. The incremental allowance.
7. The allowance for sampling risk (the upper error limit).
8. The audit conclusion.

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Recorded book value Maximum tolerable overstatement Anticipated error $1,000,000 $1,100,000 $15,000