Question: In using difference estimation, an auditor took a random sample of 100 inventory items from a large population to test for proper pricing. Several of

In using difference estimation, an auditor took a random sample of 100 inventory items from a large population to test for proper pricing. Several of the inventory items were misstated, but the combined net amount of the sample misstatement was not material. In addition, a review of the individual misstatements indicated that no misstatement was by itself material. As a result, the auditor did not investigate the misstatements or make a statistical evaluation. Explain why this practice is improper.

Step by Step Solution

★★★★★

3.38 Rating (170 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

This practice is improper for a number of reasons 1 No determination was made as to w... 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 (128).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

From Exercise 6: A random sample of 100 baseballs has been selected from each of two large crates of baseballs. One crate of baseballs was produced by Allen Sports Products; the other was produced by...

A random sample of 100 households' weekly food expenditure represented by x from a particular city gave the following statistics: (a) Find the mean and standard deviation for these data. (b) Assuming...

A random sample of 100 births has 48 male babies. Is this result significant at the 0.05 level? What is the P-value for this result? Assume that male births and female births are equally likely. The...

Question content area top Part 1 In using difference estimation, an auditor took a random sample of 1 0 0 inventory items from a large population to test for proper pricing. Several of the inventory...

CLO4 Maximum Marks 10 Q3A: In using difference estimation, an auditor took a random sample of 100 inventory items from a large population to test for proper pricing. Several of the inventory items...

In using difference estimation, an auditor took a random sample of 100 inventory items from a large population to test for proper pricing. Several of the inventory items were misstated, but the...

Thanks you in advance :- For each of the following rejection regions, sketch the sampling distribution of f and indicate the ocation of the rejection region on your sketch: 3. f> 1.440. where of = 6...

Thanks Expert tutors:- Radon exposure in Egyptian tombs, Refer to the Radiation Protection Dosimetry (Dec. 2010) study of radon exposure in Egyptian tombs. Exercise 7.39 (p. 334). The radon...

Please quick reply:- Radon exposure in Egyptian tombs, Refer to the Radiation Protection Dosimetry (Dec. 2010) study of radon exposure in Egyptian tombs. Exercise 7.39 (p. 334). The radon...

Thanks in advance:- Radon exposure in Egyptian tombs, Refer to the Radiation Protection Dosimetry (Dec. 2010) study of radon exposure in Egyptian tombs. Exercise 7.39 (p. 334). The radon...

4) {+45} ChevBob decides to use a largely solids-free water-based solution of the highly soluble potassium formate (KCOOH) salt for drilling a reservoir interval with alternating sand-shale...

Argon gas enters an adiabatic compressor at 120 kPa and 30C with a velocity of 20 m/s and exits at 1.2 MPa, 530C, and 80 m/s. The inlet area of the compressor is 130 cm2. Assuming the surroundings to...

Voluntary arrangements to restructure a company's debt to avoid bankruptcy may be beneficial to all involved parties. This may involve Blank _ _ _ _ _ _ . Multiple choice question. extension or...

15. The costs per unit of the three products A, B and C of a company are given below: Production arrangements are such that if one product is given up, the production of the others can be raised by...

Rainbow City was designed to attract orphan children. Its current population of 30,000 children has a mean age of 6 years and a standard deviation of 10 years. The distribution of ages is skewed to...

(Class Exercise) Refer to Exercises 1.11 and 1.12 (pages 21 and 22). Using the population defined by your class or using the Students data file, the instructor will select a variable, such as weekly...

For a single roll of a die, let y = 1 for an even number and y = 0 for an odd number, to simulate the vote in an election with two equally preferred candidates. (a) Construct the probability...

A firm is considering an investment in a new machine with a price of $17.3 million to replace its existing machine. The current machine has a book value of $7 million and a market value of $5.7...

(NPV, PI, and IRR calculations) Fijisawa Inc. is considering a major expansion of its product line and has estimated the following cash flows associated with such an expansion. The initial outlay...

The following are the cash flows of two projects If the opportunity cost of capital is 11%. calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2...