Using statistical sampling to assist in verifying the year-end accounts payable balance,an auditor has accumulated the following data
Projecting the misstatement to the population,the auditor's estimate of year-end accounts payable balance would be:
A)$5,050,000.
B)$5,125,000.
C)$6,000,000.
D)$6,150,000.

Question

Using statistical sampling to assist in verifying the year-end accounts payable balance,an auditor has accumulated the following data 
Projecting the misstatement to the population,the auditor's estimate of year-end accounts payable balance would be:
A)$5,050,000. 
B)$5,125,000. 
C)$6,000,000. 
D)$6,150,000.

Quizplus · Accepted Answer

Assuming the auditor used stratified random sampling to obtain a representative sample of the accounts payable population, we can use the formula for projected misstatement to estimate the year-end accounts payable balance.
Projected misstatement = (Sample misstatement / Sample size) x Population size
= (90,000 / 30) x 20,000
= 600,000
Therefore, the auditor's estimate of year-end accounts payable balance would be the population size plus the projected misstatement, or $6,000,000. Choice C is the best answer.

Using Statistical Sampling to Assist in Verifying the Year-End Accounts