Indicate the action the auditor should take for the sampling results described below: Additional facts (these...

 

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Indicate the action the auditor should take for the sampling results described below: Additional facts (these are the same for each problem of this type unless altered by information given for each case): • Book value of the population is $3,000,000 • Sampling tolerable misstatement is $50,000. Base your decisions on tolerable misstatement, rather than overall planning materiality. The audit misstatement posting threshold is $10,000 • Adjustments are not proposed unless necessary. • It is feasible to expand the sample, if necessary. • The projected error is an estimate of the total error in the population, including the actual errors identified. Ignore sampling risk. $30,000 actual misstatements (Two pricing errors in a sample of 50 items). Client is willing to adjust for actual errors. $100,000 projected misstatement O Propose an adjustment for actual errors and perform additional testing. O Accept population as fairly stated and take no further action. O Place the entire projected error on the summary of possible adjustments. O Prepare an adjustment for the actual errors, and place unadjusted errors on the summary of possible adjustments. O Perform additional testing in a specific area. Request the client fix the population. Indicate the action the auditor should take for the sampling results described below: Additional facts (these are the same for each problem of this type unless altered by information given for each case): • Book value of the population is $3,000,000 • Sampling tolerable misstatement is $50,000. Base your decisions on tolerable misstatement, rather than overall planning materiality. The audit misstatement posting threshold is $10,000 • Adjustments are not proposed unless necessary. • It is feasible to expand the sample, if necessary. • The projected error is an estimate of the total error in the population, including the actual errors identified. Ignore sampling risk. $30,000 actual misstatements (Two pricing errors in a sample of 50 items). Client is willing to adjust for actual errors. $100,000 projected misstatement O Propose an adjustment for actual errors and perform additional testing. O Accept population as fairly stated and take no further action. O Place the entire projected error on the summary of possible adjustments. O Prepare an adjustment for the actual errors, and place unadjusted errors on the summary of possible adjustments. O Perform additional testing in a specific area. Request the client fix the population.

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