Question: The following information relates to a non-statistical sample used for a price test of inventory conducted by an audit assistant: Population Information Sample Information Number
The following information relates to a non-statistical sample used for a price test of inventory conducted by an audit assistant:
| Population Information
| Sample Information | ||||
| Number of items | Amount | Number of Items | Amount | Misstatement | |
| Greater than $15,000 | 20 | $1,500,000 | 20 | $900,000 | $540 |
| Less than $15,000 | 140 | $1,150,000 | 20 | $ 85,000 | $310 |
| Total | 160 | $2,650,000 | 40 | $985,000 | $850 |
REQUIRED:
a) What is the best estimate of the total misstatement in inventory?
b) Assuming the results are not acceptable, what two possible courses of action can the auditor take?
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