You are auditing the inventory of Husky Manufacturing Company for the year ended December 31, 2009. The book value is $8,124,998.66. Tolerable misstatement is $400,000 and expected misstatement is $10,000. Detection risk is 10% (confidence level of 90%). MUS sampling is to be used for a price test.
Required
a. Calculate the sampling interval and maximum sample size.
b. Calculate the most likely misstatement and the upper misstatement limit assuming the following misstatements were found in the sample:
Book Value Audit Value
$41,906.45...............$36,906.45
335,643.28...............333,643.28
c. Use ACL to calculate the sample interval and sample size and evaluate the two misstatements shown in part (b):
(i) Import the file labeled "Husky Inventory 2009."
(ii) Choose "Sampling" from the menu, then "Calculate Sample Size," then "Monetary," and fill in the information provided above.
(iii) Compare the results with part (a).
(iv) Choose "Sampling," "Evaluate Error," and enter the information using the misstatements in part (b).
(v) Compare the results with part (b).