1 Substantive Testing Problem - This is a comprehensive PPS/MUS Sampling problem

The information below pertains to your current client ACC400-500, Inc..

Table A: General Information Zebulon Corp. Accounts Receivable audit. NOTE: all the information that you might need from figure 9.14 and figure 9.15 in the textbook have been provided in the table below. Round your sample size number to the next nearest whole number.For all other calculations round your result to 3 decimal places.

The A/R total book value (population) (P)

$5,250,000.00

Tolerable Misstatement(TM)

$750,000.00

Expected misstatement in the population (EM)

75,000.00

Error Expansion Factor (EEF) at 15% risk of Incorrect Acceptance (EEF)

Reliability Factor: (RF) is at the risk of incorrect acceptance at 15%

Formula Section:

Sample Interval (SI) or (I) = {TM - (EM x EEF)}/RF

Sample size (n) = Pop/I,or n = (Pop x RF)/(TM - (EM x EEF))

Basic Precision = RF x SI

UML = Basic Precision + Projected Misstatements + Incremental allowance for sampling risk