In auditing the valuation of inventory, the auditor, Claire Butler, decided to use difference estimation. She decided to select an unrestricted random sample of 80 inventory items from a population of 1,840 that had a book value of $175,820. Butler decided in advance that she was willing to accept a maximum misstatement in the population of $6,000 at an ARIA of 5 percent. There were eight misstatements in the sample, which were as follows:

a. Calculate the point estimate, the computed precision interval, the confidence interval, and the confidence limits for the population. Label each calculation. Use a computer for this purpose (instructor's option).
b. Should Butler accept the book value of the population? Explain.
c. What options are available to her at thispoint?

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Audit Value Book Value Sample Misstatements 812.50 12.50 10.00 25.40 600.10 12 51.06 83.11 740.50 78.20 51.10 61.50 651.90 0 81.06 104.22 $(72.00) 65.70 41.10 36.10 51.80 (.12) 30.00 21.11 Total $1,594.79 $1,768.48 $173.69