The auditors wish to use mean estimation sampling to evaluate the reasonableness of the book value of accounts receivable of the client, Smith Inc. The client has 10,000 accounts receivable accounts with a total general ledger balance of $1,500,000. The auditors estimate the population standard deviation to be $25. After examining the overall audit plan the auditors set the tolerable misstatement at $60,000, risk of incorrect rejection at 5% and risk of incorrect acceptance at 10%.

1. calculate the sample size with replacement
2. calculate the sample size without replacement
3. Assuming the following results:

Mean audited value of sample items is $146,

Standard deviation of sample 28

Using mean estimation calculate the projected value of the population

4. using the facts in part b, calculate the projected misstatement
5. using the facts in part b calculate the achieved allowance for sampling risk (i.e., achieved precision or A)
6. State the auditors conclusion about whether to accept or reject the population and show all work to show how you arrived at this conclusion