Reference no: EM133922918

Problem

Edwards has decided to use monetary unit sampling (MUS) in the audit of a client's accounts rectivable balance. Few, if any. misstatements of the account balance are expected Edwards plans to use the following MUS table Number of Overstatement Misstatements 0 2 3 Risk of Incorrect Acceptance 15 5% 10% 15% 20% 4.61 3.00 2.31 1.90 1.61 6.64 4.75 3.89 3.38 3.00 8.41 6.30 5.33 4.72 4.28 10.05 7.76 6.69 6.02 5.52 11.61 9.16 8.00 7.27 6.73 A BETA Identify the advantages of using MUS over classical variables sampling. Calculate the sampling interval and the sample size Edwards should use given the following information: Tolerable misstatement $ 15.000 Risk of incorrect acceptance 5% Estimated misstatement 0 Recorded amount of accounts receivable $300,000 Note: Requirements are not related to requirements. Assuming a sampling interval of $5,000, calculate the total projected misstatement if the following three errors were discovered in MUS: Misstatement Book Value Andited Value 2 $ 400 500 $ 320 0 5 6,000 2,500 1. Calculate basic precision and incremental allowance. Calculate the upper limit on misstatements. Get the instant assignment help. Will you accept or reject the account as materially correct? Explain.