Kramer, CPA, is auditing Cosmo$$s accounts receivable using probability proportional to size sampling $($PPS$),$ which are recorded at $$20$ million. Based on the expected misstatement, tolerable misstatement, and risk of incorrect acceptance, Kramer determined a sample size of $50$ items and a sampling interval of $$400,000.$

After confirming the accounts with Cosmo$$s customers, Kramer identified the following discrepancies

Account Recorded balance Audited value

E$.$ Benes $ $110,000$ $ $99,000$

N$.$ Post $ $240,000$ $ $144,000$

J$.$ Seinfeld $ $650,000$ $ $400,000$

The following factors are available from PPS Sampling Tables for a $10\%$ risk of incorrect acceptance $($the level used by Kramer$)$

Overstatement Errors Factor

$02\mathrm{.}31$

$13\mathrm{.}89$

$25\mathrm{.}33$

$36\mathrm{.}69$

Which of the following statements is not true?

Multiple Choice

The actual misstatement is $$357,000.$

The basic allowance for sampling risk is $$924,000.$

The projected misstatement is $$353,846.$

The incremental allowance for sampling risk is $$110,400.$