Question: The confidence interval for an audit test where ratio estimation was used is ($26,000) ($40,000). The allowable error for the audit test was set

The confidence interval for an audit test where ratio estimation was used is $$26,000$ ± $$40,000$. The allowable error for the audit test was set at $$60,000$. Show graphically by the use of the proper decision rule that the population is not acceptable. Calculate the amount of the adjustment to the recorded balance that would be necessary for the population to be accepted as not materially misstated. Assuming an adjustment is not made, what other options does the auditor have ?

Step by Step Solution

★★★★★

3.43 Rating (150 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Statistical Sampling To Auditing Questions!

Required a. Use professional judgment in deciding on the preliminary judgment about materiality for earnings, current assets, current liabilities, and total assets. Your conclusions should be stated...

SHOW ALL WORK, ENTER ANSWERS ON THE BLANK PROVIDED Name SB ID #:_ _ Your TA This is worth 5% of your final exam grade. Please print and hand in this original document with your work on it. Show all...

Armandy Discount Stores is a large department store catering primarily to low-income people. More than 20,000 different products are kept in inventory and sold by the store. Management has followed...

Possible Multiple Choice Questions for the Exam. Focus on the topics discussed in class. Chapter 1 Multiple Choice Identify the choice that best completes the statement or answers the question. ____...

Final Exam MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Solve the problem. 1) The average age of the students in a statistics class is 22...

Set Student Name: 1. Answer true or false for each part, and if false, explain your answer. a. The point estimate for the population mean, , of an x distribution is x-bar, computed from a random...

Set Week Three During this week, we will look at ways of testing multiple (more than two) data samples at the same time. We will continue to use the data and assignment file that we opened in Week 2,...

ID Salary Compa- Midpoint ratio Age Performance Service Gender Rating Raise Degree Gender Grade 1 Copy Employee Data set to this page. The ongoing question that the weekly assignments will focus on...

e. Based on the data shown below, explain why homo-DNA could be detrimental to cellular function (10 points). Tm (C) 6'-CGCGAA- TTCGCG-4' PH 7.0 pH 4.3 DNA Homo-DNA 58 86 44 75 homo-DNA (R=H)...

A put with exercise price = $40 has a price of $1. A call option with the same exercise price costs $5. r f = 5%. Option has 3-months left to expiration.

What are the two main conditions that must be satisfied to provide load balancing / fault - tolerance for Internet servers?

Describe advantages and disadvantages of all the OD intervention models in this chapter.

Cities in the United States have a positive correlation between y = crime rate and x = size of police force. Does this imply that x causes y? Explain.

An association exists between college GPA and whether a college student has ever used marijuana. Explain how (a) The direction of a causal arrow might go in either direction. (b) A third variable...

Explain what it means to control for a variable, using an example to illustrate.

4 Alfred Enterprises (AE) has two manufacturing divisions: the Sydney division and the Melbourne division. The Sydney division produces motors which are sold to the Melbourne division and to outside...

Ariana, Incorporated, is considering a project that will result in initial aftertax cash savings of $ 6 . 3 million at the end of the first year, and these savings will grow at a rate of 3 percent...

L01 6. Calculate the 6. Calculating Expected Return. Based on the following information, calculate the expected return. State of Economy Probability of State of Economy Rate of Return If State Occurs...