Assume a mean-per-unit estimation variables sampling application with a tolerable misstatement of $70,000 and a book value of $700,000. After performing the sampling plan, the auditors calculated an allowance for sampling risk of $45,000 and a point estimate of the population's total audited value to be $650,000. Based on these results, the auditor would:

1. Conclude that there is too great a risk that the account balance is materially misstated, because the tolerable misstatement exceeds to the projected misstatement.
2. Conclude that the population does not contain a material misstatement, because the total audit value plus or minus tolerable misstatement includes the book value.
3. Conclude that there is too great a risk that the account balance is materially misstated, because one limit of the interval calculated by projected misstatement + or - allowance for sampling risk exceeds the tolerable misstatement.
4. Conclude that the population does not contain a material misstatement, because the tolerable misstatement exceeds the allowance for sampling risk.