$9$A$-10.$ The auditors wish to test the valuation of accounts receivable in the audit of Desert Enterprises of Bullhead City. The client has

$$500,000$ of total recorded receivables, composed of $850$ accounts. The auditors have determined the following:

The auditors have decided to use monetary unit sampling.

Required: $,a.$ For planning the sample, calculate:

$(1)$ Required sample size.

$(2)$ Sampling interval.

b$.$ Assume that the auditors have tested the sample and discovered three misstatements:

$(1)$ Projected misstatement.

$(2)$ Basic precision.

$(3)$ Incremental allowance.

$(4)$ Upper limit on misstatement.

c$.$ Explain how the auditors would consider the results calculated in requirement $(b).$

This problem includes additional parts that require the use of generalized audit software. See the Connect @ Instructor Library or

Connect's $o.$ Additional Student Resources for more information.