Maurice Tutor

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Category > Accounting Posted 26 Sep 2017 My Price 9.00

probability-proportional-to-size

Hill has decided to use probability-proportional-to-size (PPS) sampling, sometimes called dollar-unit sampling, in the audit of a client’s accounts receivable balances. Hill plans to use the following PPS sampling table:

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Table

Reliability Factors for Overstatements

Number of overstatements

  

Risk of incorrect acceptance

1%

5%

10%

15%

20%

0

4.61

3.00

2.31

1.90

1.61

1

6.64

4.75

3.89

3.38

3.00

2

8.41

6.30

5.33

4.72

4.28

3

10.05

7.76

6.69

6.02

5.52

4

11.61

9.16

8.00

7.27

6.73

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Additional information

  

Tolerable misstatements

  

(net of effect of expected misstatements)

$ 24,000

Risk of incorrect acceptance

20%

Number of misstatements

1

Recorded amount of accounts receivable

$240,000

Number of accounts

360

 

Answers

Maurice Tutor
(5)
Status NEW Posted 26 Sep 2017 10:09 PM My Price 9.00

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