Chapter 9 HW

Chapter 9 HW - Chapter 9. 9-25. a. the auditors think that...

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Chapter 9. 9-25. a. the auditors think that their legal and professional responsibility is to find overstatements than understatements because the users are more likely be concerned about overstatements. However, the overall responsibility of the auditor is to detect both overstatements and understatements. b. the tolerable amounts are the allocated planning amounts that the auditor thinks the accounts could be misstated. It is unlikely that all these accounts are misstated by the tolerable misstatement amounts. Some of them could be more or less than the tolerable misstatements. So the totals of the tolerable misstatements are likely to exceed the preliminary judgments. c. this is possible because of the estimate of sampling error. d. 1. The auditor should be more concerned about the understatements because the total estimated understatement amount is $30,000 is higher than the preliminary judgment amount of $20,000. 2. The auditor should be more concerned about accounts receivables because the total understatements amount exceeds the total tolerable amount ($19,000 against $18,000). e. 1. This can happen because the total of tolerable amounts was higher than preliminary
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Chapter 9 HW - Chapter 9. 9-25. a. the auditors think that...

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