1. Learning Team Assignment: Audit Sampling Case Memo Resources: Modern Auditing: Assurance Services and the Integrity of Financial Reporting. Prepare a 700-800-word memo to the Audit Partner, John Smith, summarizing your findings from the following case: o Case 13-36 Mt. Hood FurniturePPS Sampling Problem in Ch. 13 13-36 (Mt. Hood FurniturePPS sampling problem) you have been assigned the task of testing the accuracy of the final inventory compilation for Mt. Hood Furniture. You may assume that you have separately observed the inventory and that you are satisfied that the inventory was accurately counted. However, you need to test that quantities were accurately transcribed to the final accumulation and valuation of inventory and that the inventory is correctly priced and accumulated. The table beginning on page 617 presents the audited values associated with Mt. Hoods pricing and accumulation of all items in inventory. The book values will be given to you by your professor. You may assume that you have performed the tests to determine the proper pricing for raw materials, work in process, and finished goods. The student should understand that the auditor will normally obtain this information only for the items included in the sample. Required 1. Identify the audit objectives that are accomplished by this test. 2. Determine sample size based on the following audit judgments. a. Tolerable misstatement is assessed at $325,000. b. The risk of incorrect acceptance is assessed at 37 percent. c. Anticipated misstatement is assessed at $100,000. 3. Develop a scenario that is consistent with setting the risk of incorrect acceptance at 37 percent