Zimmerman Is Auditing a Client's Accounts Balance Recorded at $1 $$\begin{array} { c c } \text { Recorded Balarice } & \text { Audited Value } \\\$ 20,000 & \$ 16,000 \\\$ 5,000 & \$ 2,000\end{array}$$

Multiple Choice

Zimmerman is auditing a client's accounts balance recorded at $1 million using monetary unit sampling.After assessing the appropriate parameters,Zimmerman determined an appropriate sample size of 100 items.The following two misstatements were identified as a result of the substantive tests: $$\begin{array} { c c } \text { Recorded Balarice } & \text { Audited Value } \\\$ 20,000 & \$ 16,000 \\\$ 5,000 & \$ 2,000\end{array}$$ Assume that Zimmerman's parameters included a tolerable misstatement of $60,000 and a risk of incorrect acceptance of 5 percent.(Confidence factors for a 5 percent risk of incorrect acceptance are shown below) : $$\begin{array} { c c } \text { Gverstatemert } & \text { Factor } \\\text { ETcrs } & \\0 & 3.00 \\1 & 4.75 \\2 & 6.30\end{array}$$ Which of the following is not true with respect to the above?

A) The actual misstatement detected by Zimmerman is $6,500.
B) The projected misstatement is $7,000.
C) The basic allowance for sampling risk is $30,000.
D) If the upper limit on misstatements is $46,750,Zimmerman should accept the account balance as fairly stated.