7 Question 5 - Audit Sampling You have conducted the audit on Accounts Receivable for Skillipo Ltd. You are now evaluating the results of a non-statistical sample of 85 accounts receivable confirmation. Information on the sample and population are included below. An overstatement or understatement of more than $250,000 is considered material. Recorded Sample Population No. of Accounts Value 85 1,317,598 797 8,658,935 Misstatement? The confirmation responses were received with the only exceptions as follows: Account Recorded Confirmation No. Value Response 125 $ 29,296 $ 25,759 247 $194,912 $175,621 288 $8,654 $4,654 487 $17,443 0 546 $9,739 $8,757 635 $42,768 $20,832 893 $15,628 0 Auditor Follow-up Customer was charged the wrong price $19,291 shipment recorded on 30 December; goods were not shipped until 3 January Customer sent $4,000 payment on 29 December; received on 2 January $17,443 shipment recorded on 30 December; goods were not shipped until 2 January Customer received less than the full quantity ordered. $21,936 shipment recorded on 30 December; goods were not shipped until 2 January $15,628 in shipment made 30 December; goods were received by the customer on 4 January (rights passes when goods shipped) Required a) Evaluate each of the auditor's follow up results above and determine whether each represents a misstatement. (7 marks) (Present answer as a able with columns for Acct #, Misstated Amount and Explanation for misstatement or not) b) Estimate the total amount of misstatement in the accounts receivable population (ignore sampling risk in the calculation) (8 marks) c) Explain whether the population is acceptable or not. (5 marks)