Suppose an auditor calculates an estimate of the errors by direct projection from the sample to the population.If the auditor finds $15 000 of net overstatement errors in a sample of $100 000 out of a total population of $500 000, the estimate of errors in the population will be:
A) $75 000.
B) $7 500.
C) $750.
D) $750 000.

Question

Quizplus · Accepted Answer

The auditor found $15,000 of errors in a $100,000 sample. To estimate the total errors in the entire $500,000 population, you scale up the error found in the sample proportionally. ($15,000 / $100,000) * $500,000 = $75,000.

Suppose an Auditor Calculates an Estimate of the Errors by Direct