question 4

(14. Sampling Terri Sampson is auditing the accounts receivable of Bikkely Ltd for the year ended 30th June 2020. Bikkely's accounts receivable balance was recorded at $8,500,000 and comprised more than 2,000 customer accounts. However Bikkely's 10 largest Customer balances comprised a high percentage of the recoded accounts receivable (more than $1,500,000 or 30%}. As a result, Terri is considering using Dollar Unit Sampling. Based on prior audits and otherjudgments, Terri has established the following parameters: Risk of Incorrect Acceptance 10% Tolerable Error $335,000 Expected Error $180,000 Reguirgd: 3. Determine the required sample size that would be used by Terri in the audit of Bikkeiy Ltd. Explain how you arrived at this sample size - marks will be based on your workingsliogiclapproach, as well as the sample size specified. b. Calculate the sampling interval - show all workings. c. in your own words explain the concept of tolerable error in dollar unit sampling - this must be written in your own words. [6+ 2 +2 = 10 Marks]