Question

In a monetary unit sample with a sampling interval of $22,900, an auditor discovered that a...

In a monetary unit sample with a sampling interval of $22,900, an auditor discovered that a selected account receivable with a recorded amount of $10,000 had an audit amount of $2,600. Calculate the projected misstatement for this one item.

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Answer #1

Explanation:

MUS Is a commonly used method of statistical sampling for tests of details of balances because it provides a sample statistical result expressed in dollars . Given that only one statement was detected , the projected misstatement for this sample is the product of the tainting percentage and the sampling interval . The tainting percentage is calculated as the difference between the recorded amount and the audited amount, divided by the recorded amount.

In this sample the tainting percentage is 74%

[($10000-$2600) ÷10000]=74%

Multiplying this number by the sampling interval results in a projected missstatement based on the sample of [$22900×74%]=$16946.

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