Monetary$-$Unit$-$Sampling Problem

You work for a top$-$notch audit firm, Foreman & Griswold LLP$.$ You have been assigned to audit

accounts receivable at FMG Sporting Goods. You will be auditing accounts receivable using the

monetary unit sampling method. The account balance is $$7,000,000.$

$,$ Tolerable misstatement $=$$$420,000$

$,$ Expected misstatement $=$$$52,500$

Risk of incorrect acceptance $=5\%$

a$.$ Calculate the sample size.

b$.$ Calculate the sampling interval.

c$.$ You have identified the following errors during your testing. Calculate the upper

misstatement limit$.$

d$.$ After assessing the test results, what is your conclusion?