You Are Planning to Use Monetary Unit Sampling to Evaluate

Essay

You are planning to use monetary unit sampling to evaluate accounts receivable for Violet Company.The accounts receivable account totals $3,000,000.You have assessed a risk of incorrect acceptance of 5 percent,a tolerable misstatement of $120,000,and an expected misstatement of $24,000.
a.Calculate the sample size and sampling interval.
b.Regardless of your answer to (a),use a sample size of 125 and the related sampling interval and calculate the upper limit on misstatements assuming you found the following differences.

$\begin{array}{l}\begin{array} { l } \text { Account } & \text { Recorded Balance } \\102& 2,000\\235 & 3,200\end{array}\begin{array} { l } \text { Audited Value } & \text { Difference } \\\$600& \$1,400\\1,920& 1,280\end{array}\end{array}$