Missing problem 9 - 45 from MP Principles of Auditing and Other Assurance Services with ACL software CD.
A mean per unit sampling to evaluate the reasonableness of the book value of the accounts receivable has 10,000 accounts receivable accounts with a total book value of 1,500,000. There are estimates that the population's standard deviation to be equal to $25. After examining the audit plan, it is believed that the test's tolerable misstatement is $60,000 and that the risk of incorrect rejection of 5 % and a risk of incorrect acceptance of 10% are appropriate.
a. calculate the required sample size
b. Assuming the following results:
Avg audited value of $146
Standard deviation of sample: 28
Use the per mean per unit method to:
1. Calculate the point of the estimate of the account's audited value.
2. Calculate the projected misstatement for the population
3. Calculate the adjusted allowance for sampling risk
4. State Rachel's conclusion in the situation