Question: Regarding the facts in problem 8 : a. If your tolerable error limit (TEL) is ($ 250,000) (10 percent of the account balance), are you

Regarding the facts in problem 8 :

a. If your tolerable error limit (TEL) is $\$ 250,000$ (10 percent of the account balance), are you satisfied that accounts receivable are fairly stated? Why or why not?

b. If your tolerable error limit (TEL) is $\$ 175,000$ (7 percent of the account balance), are you satisfied that accounts receivable are fairly stated? Why or why not?

c. Assuming that the answer in Part b is no (you cannot accept the hypothesis that the account is fairly stated), discuss the various alternatives you have available to satisfy yourself that the account is not materially misstated.

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