The auditors used statistical sampling for the audit of inventory and calculated an estimated total audited value of $1,100,000;the client's book value for inventory is $1,200,000.This misstatement is properly classified as a:
A)Factual misstatement.
B)Judgmental misstatement.
C)Projected misstatement.
D)Relevance misstatement.

Question

Quizplus · Accepted Answer

A projected misstatement is an estimate of the misstatement in a population, based on a sample. Since the auditors used statistical sampling to estimate the total audited value of inventory, the difference between this estimate and the client's book value is considered a projected misstatement.

The Auditors Used Statistical Sampling for the Audit of Inventory