L12 Notes_Part_5 - 7. Draw final conclusions. The auditor...

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Sample Size = BV * R* ETF/(TM – (AM*EF)) = 2,500,000 * R*1.00/(125,000 – (27,722*EF) = 2,500,000 * 3.0/(125,000 – (27222*1.6)) = 93 e rror E xpansion F actors ( EF ) for expected misstatements Risk of Incorrect Acceptance Factor 1% 5% 10% 15% 20% 1.9 1.6 1.5 1.4 1.3 R eliability factors for misstatements of overstatements Risk of Incorrect Acceptance Number of Overstatements1% 5% 10% 15% 20% 0 4.61 3.00 2.31 1.90 1.61 1 6.64 4.75 3.89 3.38 3.00 2 8.41 6.30 5.33 4.72 4.28 3 10.05 7.76 6.69 6.02 5.52
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Steps in MUS Sampling Application Performance 4. Select sample items. 5. Perform the auditing procedures. Evaluation 6. Calculate the projected misstatement and the upper limit on misstatement
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Unformatted text preview: 7. Draw final conclusions. The auditor selects a sample for MUS by using a systematic selection approach called probability-proportionate-to-size selection. The sampling interval can be determined by dividing the book value of the population by the sample size. Each individual dollar in the population has an equal chance of being selected. Select Sample Population Item Recorded Invoice # Amount 1 357 2 1281 3 60 4 573 5 729 MUS Pulling a Sample Cumulative Total 357 1638 1698 2271 3000 How many sampling units are in the population? Pull a systematic sample of 6 units with a random start. Which invoices do we pull?...
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.

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L12 Notes_Part_5 - 7. Draw final conclusions. The auditor...

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