In-Class Team Case 9A-13. Edwards has decided to use monetary unit sampling (MUS) in the audit of a client's accounts receivable balance. Few, if any, misstatements of the account balance are expected. Edwards plans to use the following MUS table: Number of Overstatement Risk of Incorrect Acceptance Misstatements 1% 5% 10% 15% 20% 0 4.61 3.00 2.31 1.90 1.61 1 6.64 4.75 3.89 3.38 3.00 2 8.41 6.30 5.33 4.72 4.28 3 10.05 7.76 6.69 6.02 5.52 4 11.61 9.16 8.00 7.27 6.73 Required: a. Identify the advantages of using MUS over classical variables sampling. b. Calculate the sampling interval and the sample size Edwards should use given the following information: Tolerable misstatement Risk of incorrect acceptance Estimated misstatement $ 15,000 5% $ 0 Recorded amount of accounts receivable $300,000 Tolerable misstatement $ 15,000 Risk of incorrect acceptance 5% Estimated misstatement $ 0 Recorded amount of accounts receivable $300,000 Note: Requirements (c) through (f) are not related to requirements (a) and (b). c. Assuming a sampling interval of $5,000, calculate the total projected misstatement if the following three errors were discovered in MUS: Misstatement Book Value Audited Value 1 $ 400 $ 320 2 500 0 5 6,000 2,500 d. Calculate basic precision and incremental allowance. e. Calculate the upper limit on misstatements. f. Will you accept or reject the account as materially correct? Explain. This problem includes additional parts that require the use of generalized audit software. See the Connect Instructor Library or Connect's Additional Student Resources for more information. (AICPA, adapted)