Whenever a statistical method is used, a decision rule determines whether the population is acceptable.The decision rule for monetary-unit sampling is 'Accept the conclusion that the book value is NOT misstated by a material amount if:
A) the overstatement tolerable misstatement amount falls between the lower and upper misstatement bounds.'
B) the upper misstatement bound falls between the understatement and overstatement tolerable misstatement amounts.'
C) both the understatement and overstatement tolerable misstatement amounts fall between the upper and lower misstatement bounds.'
D) both the lower and upper misstatement bounds falls between the understatement and overstatement tolerable misstatement amounts.'

Question

Quizplus · Accepted Answer

The decision rule for monetary-unit sampling is to accept that the book value is not materially misstated if both the lower and upper misstatement bounds fall between the understatement and overstatement tolerable misstatement amounts.

Whenever a Statistical Method Is Used, a Decision Rule Determines