Zimmerman is auditing a client's accounts balance recorded at $1 million using monetary unit sampling.After assessing the appropriate parameters,Zimmerman determined an appropriate sample size of 100 items.The following two misstatements were identified as a result of the substantive tests: Assume that Zimmerman's parameters included a tolerable misstatement of $60,000 and a risk of incorrect acceptance of 5%.(Confidence factors for a 5% risk of incorrect acceptance are shown below): Which of the following is not true with respect to the above?
A) The actual misstatement detected by Zimmerman is $6,500.
B) The projected misstatement is $7,000.
C) The basic allowance for sampling risk is $30,000.
D) If the upper limit on misstatements is $46,750, Zimmerman should accept the account balance as fairly stated.

Question

Zimmerman is auditing a client's accounts balance recorded at $1 million using monetary unit sampling.After assessing the appropriate parameters,Zimmerman determined an appropriate sample size of 100 items.The following two misstatements were identified as a result of the substantive tests:  Assume that Zimmerman's parameters included a tolerable misstatement of $60,000 and a risk of incorrect acceptance of 5%.(Confidence factors for a 5% risk of incorrect acceptance are shown below):  Which of the following is not true with respect to the above?
A) The actual misstatement detected by Zimmerman is $6,500. 
B) The projected misstatement is $7,000. 
C) The basic allowance for sampling risk is $30,000. 
D) If the upper limit on misstatements is $46,750, Zimmerman should accept the account balance as fairly stated.

Quizplus · Accepted Answer

The Answer of Zimmerman is auditing a client's accounts balance recorded at $1 million using monetary unit sampling.After assessing the appropriate parameters,Zimmerman determined an appropriate sample size of 100 items.The following two misstatements were identified as a result of the substantive tests:  Assume that Zimmerman's parameters included a tolerable misstatement of $60,000 and a risk of incorrect acceptance of 5%.(Confidence factors for a 5% risk of incorrect acceptance are shown below):  Which of the following is not true with respect to the above?
A) The actual misstatement detected by Zimmerman is $6,500. 
B) The projected misstatement is $7,000. 
C) The basic allowance for sampling risk is $30,000. 
D) If the upper limit on misstatements is $46,750, Zimmerman should accept the account balance as fairly stated.

Zimmerman Is Auditing a Client's Accounts Balance Recorded at $1