A retail company has recorded sales revenue of $1,000,000 for the current accounting period. The company's auditor
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A retail company has recorded sales revenue of $1,000,000 for the current accounting period. The company's auditor wants to confirm the accuracy of this revenue figure by performing a test of controls. The auditor selects a sample of 50 sales invoices from the sales records and finds that 5 of them were recorded with incorrect prices. Assuming that the sample is representative of the entire population of sales invoices, what is the estimated amount of overstatement or understatement of sales revenue? Use a 5% risk of incorrect acceptance (tolerable error) and a 10% risk of incorrect rejection.
Related Book For
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
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