QUESTION TWO: Audit Sampling Assume that you are an audit manager and one of your audit assistants derived the following information as to the client's ending clothing stock. No. of items 20 Cost per item ($) 50 Cumulative Balance 1,000 Audit assistant's tested items Red Skirts White Skirts 20 50 1 20 50 2,000 3,000 4,000 5,000 20 50 Total cost per item ($) 1,000 1,000 1,000 1,000 1,000 1,400 1,400 1,400 1,400 2 20 50 20 70 3 20 Blue Skirts Black Skirts Green Skirts Black Cardigans Brown Cardigans Green Cardigans Blue Cardigans Black Socks White Socks Blue Socks Black Jackets 70 6,400 7,800 9,200 20 4 70 70 20 10,600 5 10 100 10 10 10 100 6 10 100 10 100 15 7 1,500 1,500 White Jackets 15 100 10,700 10,800 10,900 12,400 13,900 15,400 16,600 17,400 18,200 8 Blue Jackets 15 100 15 80 1,500 1,200 800 Black Raincoats Red Raincoats Beige Raincoats 9 10 80 10 80 800 10 Total 300 18,200 Required: a) Using the data above information, answer the following: i.) Is this a test of controls' or a test of balances'? ii.) What is the name of the method used? iii.) What is the population? iv.) What is the sample size? (5 marks) b) Assume that this list has only one error: Brown Cardigans are $900 overstated. A tolerable misstatement for this account is $800. What do you conclude and why? (6 marks)