Case 9.6 Part B

Case 9.6 Part B - 1 a Customer Number 03-5308 03-8275...

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1. a. Customer Number Total Balance 03-5308 644,329 03-8275 617,895 03-7802 514,105 01-5661 506,261 01-6827 482,657 02-7398 478,657 04-9069 468,557 02-0149 467,119 05-3038 460,106 05-2034 407,565 b. Sample size = (sampling population book value) X confidence factor (Tolerable – Expected misstatement) (7,834,787 ) X 2.3 = 45. 05 (400,000 – 0 ) Sample size = 46 7,834,787 – 12,881,551( total book value) – 5,046,765 (total already removed to direct testing) 400,000 – tolerable misstatement for account receivable 0 – estimated misstatement 2.3 – assessment of risk of material misstatement for account receivables is set to moderate. Used the confidence factor for nonstatistical sampling table and chose a high level of confidence. 2. a. The characteristic we identified that can be used to select riskier items is the percentage of total balance over 90 days past due. We chose to select all accounts with more than 50% of the total balance greater than 90 days past due. b.
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Case 9.6 Part B - 1 a Customer Number 03-5308 03-8275...

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