In a probability-proportional-to-size sample with a sampling interval of $10,000,an auditor discovered that a selected account with a book value of $6,000 had an audited value of $4,000.The projected misstatement is:
A)$2,000.
B)$3,333.
C)$6,000.
D)$10,000.

Question

Quizplus · Accepted Answer

In a probability-proportional-to-size sample, the projected misstatement is determined by multiplying the audited value of the sample item by the reciprocal of the sampling interval.

Therefore, projected misstatement = (audited value of the sample item) x (1/sampling interval)
= $4,000 x (1/10,000)
= $0.4

To estimate the projected misstatement for the entire population, the projected misstatement of each item in the sample is multiplied by its sampling interval and then summed up.

Projected misstatement for the entire population = ($0.4) x (10,000) = $4,000

Therefore, the best choice is B) $3,333, which is the closest value to $4,000 in the options provided.

In a Probability-Proportional-To-Size Sample with a Sampling Interval of $10,000,an