You Are Planning to Use Monetary Unit Sampling to Evaluate

Essay

You are planning to use monetary unit sampling to evaluate accounts receivable for Rose Company.The accounts receivable account totals $4,000,000.You have assessed a risk of incorrect acceptance of 10 percent,a tolerable misstatement of $200,000,and an expected misstatement of $40,000.
a.Calculate the sample size and sampling interval.
b.Regardless of your answer to (a),use a sample size of 66 and the related sampling interval to calculate the upper limit on misstatements assuming you found the following differences. $$\begin{array} { c c c c } \text { Account } & \text { Recorded } & \ \text { Aldited } & \text { Difference } \\&\text { Balance} & \text { Value} \\201 & \$ 1,000 & \$ 20 & \$ 200 \\532 & 2,000 & 600 & 1,400\end{array}$$