You are conducting dollar unit sampling (DUS) of the accounts receivable balances of an agricultural co-op. You are willing to accept a 5 percent risk of incorrect acceptance, the book value of the account is \(\$ 2,500,000\) and your sample size (based on a tolerable error limit of \(\$ 125,000\), an expected tainting factor of 100 percent and an expected deviation rate of zero) is 59 . The results of your sample are as follows:

a. Using the results of your sample and an assumed tainting factor of 100 percent, calculate the upper error limit (UEL). Interpret the result.

b. Repeat Part a but with actual tainting factors. Interpret the difference between that result and the result from Part a.

c. Calculate the UEL (using actual tainting factors) assuming a 10 percent acceptable risk of incorrect acceptance as opposed to a 5 percent level. Why is the result different from your result in Part b?

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Error Book Correct Tainting Number Value Value Error Factor Explanation 1 $71,330 $60,631 $10,699 15.0% Incorrect amount entered from a remit- 2 18,996 17,096 1,900 10.0% tance (valuation) Cash receipt recorded in wrong period (cutoff) 3 30,081 21,057 9,024 30.0% Incorrect price used (valuation) 4 3,555 1,422 2,133 60.0% Posting to wrong subsidiary account (classification)