Question: An auditor is determining the appropriate sample size for testing inventory valuation using MUS. The population has 2,620 inventory items valued at $12,625,000. The tolerable

An auditor is determining the appropriate sample size for testing inventory valuation using MUS. The population has 2,620 inventory items valued at $12,625,000. The tolerable misstatement for both understatements and overstatements is $500,000 at a 10% ARIA. No misstatements are expected in the population. Calculate the preliminary sample size using a 100% average misstatement assumption.

Step by Step Solution

★★★★★

3.45 Rating (161 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The preliminary sample size is calculated as follows Tolerable misstatement 500000 Average ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

185-B-A-A-A (122).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

Why is it difficult to determine the appropriate sample size for MUS? How should the auditor determine the proper sample size?

On 1st April X Lts. issued Rs1, 00, 00015% Debentures of Rs 10 each at 94% redeemable at per as follows: YearendNominal value of Total Debentures to redeemed The amount of discount to be 10% 20% 30%...

In an MUS application, how is the population size defined? What is the relationship between population size and sample size?

An auditor is determining the appropriate sample size for testing inventory valuation using MuS. The population has 3,140 inventory items valued at 519,325 , Calculate the preliminary sample stze....

An auditor is determining the appropriate sample size for testing inventory valuation using MUS. The population has 2,620 inventory items valued at $12,625,000. The tolerable misstatement for both...

An auditor is determining the appropriate sample size for testing inventory valuation using Mus. The population has 3,140 inventory items valued a Calculate the preliminary sample size. Select the...

An auditor is determining the appropriate sample size for testing inventory valuation using MUS. The population has 3,140 inventory items valued at $19,325,000. The tolerable misstatement is $575,000...

An auditor is determining the appropriate sample size for testing inventory valuation using MUS. The popula tion has 2,620 items valued at $$12,625,000$. The tolerable mis statement for both...

An auditor is determining the appropriate sample size for testing inventory valuation using MUS. The population has 4 comma 3304,330 inventory items valued at $ 12 comma 500 comma 000$12,500,000. The...

A truck enters a highway driving 60 mph. A car enters a highway at the same place 14 minutes later and drives 65 mph in the same direction. From the time the car enters the highway, how long will it...

Two positive sixteen bit numbers nl and n2 have been stored at addresses 50H-51H and 52H-53H in the internal RAM of an 8051 based system, (less significant bytes at lower addresses) with nl >n2....

Using net present worth ( NPW ) method to evaluate a potential energy retrofit measure, which of the following statements is false? BAtict ohat A . In order for the measure to be finascially viable,...

21. A Mutual Fund Company has Rs. 20 lakhs available for investment in Government Bonds, blue chip stocks, speculative stocks and short-term bank deposits. The annual expected return and risk factor...

Your comparison of the gross margin percent for Jones Drugs for the years 2012 through 2015 indicates a significant decline. This is shown by the following information: A discussion with Nandini...

The internet has dramatically increased global ecommerce activities. Both traditional "bricks and mortar" businesses and new dot-com businesses use the internet to meet business objectives. However,...

Winston Black was an audit partner at Maharajah, Davis, LLP. He was in the process of reviewing the audit files for the audit of a new client, McMullan Resourcing. McMullan was in the business of...

Assume you are going to become an entrepreneur and start your own business. Think about your talents and interests and come up with an idea for a small business venture that provides a unique product...

The Standard & Poor's 500 Index includes: Multiple Choice all of the stock listed on the New York Stock Exchange. 500 firms that are the largest in their respective economic sectors. 500 firms that...

The bank offers the following financing plan, 4 8 - month credit and constant monthly installments of 2 0 0 0 at an interest rate of 3 0 % per year, compounded biweekly. If you accept the debt, what...