(Answered) Problem - data relevant to the december 31 20x1 audit of

Accounting

Problem - Data relevant to the December 31, 20X1 audit of accounts receivable in two of your clients is presented in the tabulation below.

Company X Company Y

Clients bv $90,000.00 $200,000.00

Population size 1000 2000

Desired risk of incorrect acceptance 20% 30%

Desired risk of incorrect rejection 10% 5%

Tolerable misstatement $9,000.00 $10,000.00

Estimated Standard deviation $50.00 $25.00

a. Determine sample size for each company using MPU estimation sampling.

b. Assume the total audited value of the Company X sample is $13600 and the standard deviation is $52. Evaluate the sample results.

c. Assume the average of the sample audit values in the Company Y sample is $90 and the standard deviation is $30. Evaluate the sample results.

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