You Are Assigned to Audit Accounts Payable for a Manufacturing

Multiple Choice

You are assigned to audit accounts payable for a manufacturing client. As part of the planning, your manager sets a tolerable misstatement amount of+/- $125,000. Your review of unpaid invoices indicates an understatement error of $25,253 from a sample of $675,467. The population value of A/P is $5,241,687 at October 31st. The estimated error rate is:

A) 6%.
B) 0.001%.
C) 3%.
D) Cannot be determined.