You are auditing Raji and Company. You discover an item of inventory with an audited value of $5,000 with a recorded amount of $3,000. If this is the only error you discover, the projected misstatement for the sample would be
A) $5,000.
B) $2,000.
C) $3,000.
D) $4,000.

Question

Quizplus · Accepted Answer

The projected misstatement is calculated as the audited value minus the recorded amount, so $5,000 - $3,000 = $2,000. Therefore, the projected misstatement for the sample would be $2,000.

You Are Auditing Raji and Company