a. What was the planned sample size? (how do I determine this?)

b. What is the total Misstatement in the sample? (how do I determine this?)

c What is the most likely total misstatement in the population? (how do I determine this?)

d Calculate the upper limit on misstatement. (how do I determine this?)

e. Calculate the allowance for sampling risk (how do I determine this?)

f Would one "accept" or "reject" the population as being materially correct?

What is the risk of incorrect acceptance?

The following is a computer printout generated by audit software using monetary unit sampling: WINZ CORPORATION Receivable Sampling Evaluation Results December 31, 20X2 Population book value = $2,400,060; Tolerable misstatement = $280,090 Projected Misstatement Audited Tainting Sampling Projected Book Value Value Misstatement Percentage Interval Misstatement $ 1,000.60 $ 987.50 $ 12.50 1. 25% $80, 000.00 $ 1, 000.06 750.00 600.00 150.60 20% $80,000.60 16, 060.00 85, 000.00 60,000. 25, 000.00 NA NA 25,000.00 $ 42,000.00 Basic Precision = 3.0 * $80,000 $ 240, 060.00 Incremental Allowance Reliability Projected Incremental Factor Increment (Increment - 1) Misstatement Allowance 3.06 4.75 1.75 .75 $16,000.00 $12,000.00 6.30 1.75 .75 1,000.00 550.00 $12, 550.00 The software uses factors from the following MUS table: TABLE Reliability Factors for Overstatements Number of Risk of Incorrect Acceptance Overstatements 1% 5% 10% 15% 20% 4. 61 3.00 2.31 1.90 1.61 6.64 4.75 3.89 3.38 3.00 8.41 6.30 5.33 4.72 4.28 10.05 7.76 6.69 6.02 5.52 11. 61 9.16 8.00 7.27 6.73 Analysis Situation Research