EXHIBIT FA 2 PPSConfidence Factors for Sample Evaluation Number of Overstatement Misstatements Risk of Incorrect Acceptance 5 10 15 20 25 30 35 37 50 0 3 00 2 31 1 90 1 61 1 39 1 21 1 05 1 00 0 70 1 4 75 3 89 3 38 3 00 2 70 2 44 2 22 2 14 1 68 2 6 30 5 33 4 73 4 28 3 93 3 62 3 35 3 35 2 68 3 7 76 6 69 6 02 5 52 5 11 4 77 4 46 4 35 3 68 4 9 16 8 00 7 27 6 73 6 28 5 90 5 55 5 43 4 68 5 10 52 9 28 8 50 7 91 7 43 7 01 6 64 6 50 5 68 6 11 85 10 54 9 71 9 08 8 56 8 12 7 72 7 57 6 67 7 13 15 11 78 10 90 10 24 9 69 9 21 8 79 8 63 7 67 8 14 44 13 00 12 08 11 38 10 81 10 31 9 85 9 68 8 67 9 15 71 14 21 13 25 12 52 11 92 11 39 10 92 10 74 9 67 10 16 97 15 41 14 42 13 66 13 02 12 47 11 98 11 79 10 67 11 18 21 16 60 15 57 14 78 14 13 13 55 13 04 12 84 11 67 12 19 45 17 79 16 72 15 90 15 22 14 63 14 09 13 89 12 67 13 20 67 18 96 17 86 17 02 16 32 15 70 15 14 14 93 13 67 14 21 89 20 13 19 00 18 13 17 40 16 77 16 20 15 98 14 67 15 23 10 21 30 20 13 19 24 18 49 17 84 17 25 17 02 15 67 16 24 31 22 46 21 26 20 34 19 58 18 90 18 29 18 06 16 67 17 25 50 23 61 22 39 21 44 20 66 19 97 19 34 19 10 17 67 18 26 70 24 76 23 51 22 54 21 74 21 03 20 38 20 14 18 67 19 27 88 25 91 24 63 23 64 22 81 22 09 21 43 21 18 19 67 20 29 07 27 05 25 74 24 73 23 89 23 15 22 47 22 22 20 67 Source AICPA Audit Guide Audit Sampling Carson Allister is performing a PPS application in the audit of Bird Company's accounts receivable Based on the acceptable level of the risk of incorrect acceptance of 5 percent and a tolerable misstatement of $120,000, Allister has calculated a sample size of 75 items and a sampling interval of $25,000 After examining the sample items, the following misstatements were identified (Use Exhibit F A 2 ) Item Recorded Balance Audited Value 1 $35,000 $28,000 2 10,000 8,000 3 6,089 3,000 Required a Calculate the upper limit on misstatements for Bird Company's accounts receivable b Fill in the appropriate blanks to provide a brief description of the meaning of the upper limit on misstatements calculated in part (a) c What would Allister's conclusion be with respect to the fairness of Bird's accounts receivable balance Complete this question by entering your answers in the tabs below Required a Required b Required c Calculate the upper limit on misstatements for Bird Company's accounts receivable

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Question: EXHIBIT FA.2 PPSConfidence Factors for Sample Evaluation Number of Overstatement Misstatements Risk of Incorrect Acceptance 5% 10% 15% 20% 25% 30% 35% 37% 50% 0

EXHIBIT FA.2 PPSConfidence Factors for Sample Evaluation

Number of Overstatement Misstatements	Risk of Incorrect Acceptance
5%	10%	15%	20%	25%	30%	35%	37%	50%
0	3.00	2.31	1.90	1.61	1.39	1.21	1.05	1.00	0.70
1	4.75	3.89	3.38	3.00	2.70	2.44	2.22	2.14	1.68
2	6.30	5.33	4.73	4.28	3.93	3.62	3.35	3.35	2.68
3	7.76	6.69	6.02	5.52	5.11	4.77	4.46	4.35	3.68
4	9.16	8.00	7.27	6.73	6.28	5.90	5.55	5.43	4.68
5	10.52	9.28	8.50	7.91	7.43	7.01	6.64	6.50	5.68
6	11.85	10.54	9.71	9.08	8.56	8.12	7.72	7.57	6.67
7	13.15	11.78	10.90	10.24	9.69	9.21	8.79	8.63	7.67
8	14.44	13.00	12.08	11.38	10.81	10.31	9.85	9.68	8.67
9	15.71	14.21	13.25	12.52	11.92	11.39	10.92	10.74	9.67
10	16.97	15.41	14.42	13.66	13.02	12.47	11.98	11.79	10.67
11	18.21	16.60	15.57	14.78	14.13	13.55	13.04	12.84	11.67
12	19.45	17.79	16.72	15.90	15.22	14.63	14.09	13.89	12.67
13	20.67	18.96	17.86	17.02	16.32	15.70	15.14	14.93	13.67
14	21.89	20.13	19.00	18.13	17.40	16.77	16.20	15.98	14.67
15	23.10	21.30	20.13	19.24	18.49	17.84	17.25	17.02	15.67
16	24.31	22.46	21.26	20.34	19.58	18.90	18.29	18.06	16.67
17	25.50	23.61	22.39	21.44	20.66	19.97	19.34	19.10	17.67
18	26.70	24.76	23.51	22.54	21.74	21.03	20.38	20.14	18.67
19	27.88	25.91	24.63	23.64	22.81	22.09	21.43	21.18	19.67
20	29.07	27.05	25.74	24.73	23.89	23.15	22.47	22.22	20.67

Source: AICPA Audit Guide Audit Sampling

Carson Allister is performing a PPS application in the audit of Bird Company's accounts receivable. Based on the acceptable level of the risk of incorrect acceptance of 5 percent and a tolerable misstatement of $120,000, Allister has calculated a sample size of 75 items and a sampling interval of $25,000. After examining the sample items, the following misstatements were identified: (Use Exhibit F.A.2.): Item Recorded Balance Audited Value 1 $35,000 $28,000 2 10,000 8,000 3 6,089 3,000 Required: a. Calculate the upper limit on misstatements for Bird Company's accounts receivable. b. Fill in the appropriate blanks to provide a brief description of the meaning of the upper limit on misstatements calculated in part (a). c. What would Allister's conclusion be with respect to the fairness of Bird's accounts receivable balance? Complete this question by entering your answers in the tabs below. Required a Required b Required c Calculate the upper limit on misstatements for Bird Company's accounts receivable

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