Question: Edwards has decided to use monetary unit sampling (MUS) in the audit of a clients accounts receivable balance. Few, if any, misstatements of the account

Edwards has decided to use monetary unit sampling (MUS) in the audit of a clients accounts receivable balance. Few, if any, misstatements of the account balance are expected.

1. Calculate the sampling interval and the sample size Edwards should use given the following information:

Tolerable misstatement $ 50,000

Risk of incorrect acceptance 5%

Estimated misstatement $ 15,000

Recorded amount of accounts receivable $3,000,000

2. What is the effect on sample size of changing the risk of incorrect acceptance to 1%?

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