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Additional Module G Slides - SV

# Additional Module G Slides - SV - 4,000 would the auditor...

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Classical Variables Sampling There are different ways to estimate the  account balance Mean-per-unit Ratio estimation* Difference estimation* These methods essentially give the same  answer.
Mean-per-unit 1. Find the average account balance for  the audited sample 2. Multiply the average account balance by  the number of total observations

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Mean-per-unit Example ABC has an A/P balance of \$100,000  comprised of 130 vendors. The auditor  selects 20 items for testing. The total  audited balance of the sample is \$14,980.  If the auditor can tolerate a 7% error of the  balance and the confidence interval is +/-

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Unformatted text preview: 4,000, would the auditor conclude the balance is fairly stated? Ratio Estimation • 1. Calculate ratio for the sample: Audited Sample Bal/Book Sample Bal • 2. Multiply Sample Ratio by the Book Balance. Ratio Estimation ABC has a \$200,000 A/P balance comprised of 180 vendors. The auditor selects 25 items for testing. The unaudited balance of the sample is \$28,500 and the audited balance is \$27,770. If the auditor can tolerate a 7% error of the balance and the confidence interval is +/- 5,000, would the auditor conclude the balance is fairly stated?...
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