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Unformatted text preview: receivable balances of an agricultural co-op. You are willing to accept a 5 percent risk of incorrect acceptance, the book value of the account is $2,500,000 and your sample size (based on a tolerable misstatement of $128,000, an expected tainting factor of 100 percent and an anticipated misstatement of zero) is 59. The results of your sample are on the next slide: a. Using the results of your sample and an assumed tainting factor of 100 percent, calculate the upper misstatement limit (UML). Interpret the result. b. Repeat part a but with actual tainting factors. Interpret the difference between that result and the result from part a. c. Calculate the UML (using actual tainting factors) assuming a 10 percent ARIA as opposed to a 5 percent level. Why is the result different from your result in part b?...
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- Fall '08