Question: Edwards has decided to use monetary- unit sampling in the audit of an entitys accounts receivable balance. Few, if any, misstatements of account balance overstatement

Edwards has decided to use monetary- unit sampling in the audit of an entityâ€™s accounts receivable balance. Few, if any, misstatements of account balance overstatement are expected.

Required:

a. Identify the advantages of using monetary- unit sampling over classical variables sampling.

b. Calculate the sample size and the sampling interval Edwards should use for the following information:

Tolerable misstatement ..........$ 15,000

Expected misstatement .......... $ 6,000

Desired confidence level ........... 95%

Recorded amount of accounts receivable ...$ 300,000

c. Calculate the UML assuming that the following three misstatements were discovered in an MUSsample.

Edwards has decided to use monetary- unit sampling in the

Missta tement Number Book Vaue 400 500 3,000 Audt Vaue 320 2,500

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a The advantages of MUS over classical variables sampling are as follows MUS is generally easier to use than is classical variables sampling The calcu... View full answer

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