Question 8 Projected Likely Misstatement (Difference Method):

When marge Simpson, PA, audited the candle company inventory, a random sample of inventory types was chosen for physical observation and price testing. The sample size was 80 different types of candles and candle-making inventory. The entire inventory contained 1,740 types, and the amount in the inventory control account was $166,000. Simpson had already decided that a misstatement of as much as $6,000 in the account would not be material. The audit work revealed the following eight errors in the sample of 80.

Book Value	Audit Value
$600.00	$622.00
15.50	14.50
65.25	31.50
83.44	53.45
16.78	15.63
78.33	12.50
13.33	14.22
93.87	39.87
966.50	$803.67

Required:

Calculate the projected likely misstatement using the difference method. Discuss the decision choice of accepting or rejecting the $166,000 book value (recorded amount) without adjustment.