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An auditor is going to use MUS with the following characteristics: population size: $1,000,000; sample size:...

An auditor is going to use MUS with the following characteristics: population size: $1,000,000; sample size: 20; tolerable misstatement: $120,000. The auditor found only a $3,000 misstatement in a customer account of $75,000. What is the projected misstatement and upper misstatement level is the confidence level is 90%? (Hint – there is enough information in the question to answer.)

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Answer #1
Tolerable Misstatement = 120000/1000000 12.00%
Sampling interval = 1000000/20 50000
Assume the auditor has found $3000 of overstatement in customer's account
Book Value Audit Value Tainting factor
3000 0 1- 0/3000 = 1
Misstatement Number Tainting factor Sampling Interval Projected misstatement(Tainting factor*sampling interval) 95% misstatement Upper misstatement(Tainting factor*sampling interval*95% misstatement)
1 1 50000 50000 4.7-3 = 1.70 85000
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