Question: Evaluating a PPS sample Assume the following misstatements were found in a PPS sample: Sample Item Book Value Audit Value $ 650 $ 585 540

Evaluating a PPS sample Assume the following misstatements were found in

Evaluating a PPS sample Assume the following misstatements were found in a PPS sample: Sample Item Book Value Audit Value $ 650 $ 585 540 0 1,900 2,200 2,800 1,650 2,660 Required a. Calculate the projected misstatement assuming: 1. The sampling interval was $1,800. 2. The sampling interval was $2,000. b. If a risk of incorrect acceptance of 15% is specified in the sample design, the sampling interval is $2,000, and five misstatements are found as enumerated above, calculate: Basic precision. With an incremental allowance for sampling risk of $1,700, calculate: Upper limit on misstatement (ULM): (enter all amounts as $x,xxx)

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