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Auditing & Assurance Services 6th Edition by Timothy Louwers
Edition 6ISBN: 978-0077862343Auditing & Assurance Services 6th Edition by Timothy Louwers
Edition 6ISBN: 978-0077862343 Exercise 331
Sample Size Determination: Monetary Unit Sampling. The recorded accounts receivable balance for Warner Company was $500,000.
Required:
For each of the following independent sets of conditions, determine the appropriate sample size for the examination of Warner's accounts receivable in MUS. Based on the differences in your calculations, identify the general relationship between different factors and sample size. (RIA = risk of incorrect acceptance. TM = tolerable misstatement. EM = expected misstatement).
a. RIA = 5 percent, TM = $50,000. EM = $10,000.
b. RIA = 5 percent, TM = $50,000. EM = $25,000.
c. RIA = 10 percent, TM = $50,000. EM = $10,000.
d. RIA = 10 percent, TM = $50,000. EM = $25,000.
Required:
For each of the following independent sets of conditions, determine the appropriate sample size for the examination of Warner's accounts receivable in MUS. Based on the differences in your calculations, identify the general relationship between different factors and sample size. (RIA = risk of incorrect acceptance. TM = tolerable misstatement. EM = expected misstatement).
a. RIA = 5 percent, TM = $50,000. EM = $10,000.
b. RIA = 5 percent, TM = $50,000. EM = $25,000.
c. RIA = 10 percent, TM = $50,000. EM = $10,000.
d. RIA = 10 percent, TM = $50,000. EM = $25,000.
Explanation
Verified
Verified
a.Given RIA is 5%
Therefore sample siz...
Auditing & Assurance Services 6th Edition by Timothy Louwers
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