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You have been assigned the task of testing the accuracy of the final inventory compilation for Mt. Hood Furniture. You may assume that you have separately observed the inventory and that you are satisfied that the inventory was accurately counted. However, you need to test that quantities were accurately transcribed to the final accumulation and valuation of inventory and that the inventory is correctly priced and accumulated. The table beginning on page 617 presents the audited values associated with Mt. Hood's pricing and accumulation of all items in inventory. $6,753,764 is the Book Value you will need Required Portion: 1. Determine the amount of projected population misstatement based on your sample. 2. Considering your quantitative and qualitative results, develop a statistical conclusion and an audit conclusion based on your sample.
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