Connect Access Card for Principles of Auditing & Other Assurance Services
21st Edition
ISBN: 9781260299366
Author: Ray Whittington, Kurt Pany
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 37LOQ
To determine
Identify the appropriate answer related to the estimated audited value of the population using the difference method.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
An external auditor of Roses Corporation sent out positive confirmation requests to 1,000 customers. Population size is 2,400 accounts, with a total recorded value of P400,000. Recorded value of samples selected is P159,960 and audited value of samples is P151,360. What is the estimated population audited value using ratio estimation?
A. 400,000 B. 422,728 C. 378,480
Using the data provided in Roses Corporation, what is the projected misstatement using MPU estimation?A. 151,360 B. 20,640 C. 8,600
An external auditor of Roses Corporation sent out positive confirmation requests to 1,000 customers. Population size is 2,400 accounts, with a total recorded value of P400,000. Recorded value of samples selected is P159,960 and audited value of samples is P151,360. What is the estimated population audited value using ratio estimation?
A. 400,000 B. 422,728 C. 378,480
A component of an account balance has a recorded balance of $10,000 and an audited valueof $8,000. By using monetary unit sampling, if the sampling interval is $20,000, the projected misstatement would bea. $2,000.b. $4,000.c. $5,000.d. $10,000.
Chapter 9 Solutions
Connect Access Card for Principles of Auditing & Other Assurance Services
Ch. 9 - Prob. 1RQCh. 9 - Prob. 2RQCh. 9 - Prob. 3RQCh. 9 - Prob. 4RQCh. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 7RQCh. 9 - Prob. 8RQCh. 9 - Prob. 9RQCh. 9 - Prob. 10RQ
Ch. 9 - Prob. 11RQCh. 9 - Prob. 12RQCh. 9 - What is a dual-purpose test?Ch. 9 - Prob. 14RQCh. 9 - Prob. 15RQCh. 9 - Prob. 16RQCh. 9 - What would be the difference between an attributes...Ch. 9 - Prob. 18RQCh. 9 - Prob. 19RQCh. 9 - Prob. 20RQCh. 9 - Prob. 21RQCh. 9 - Prob. 22RQCh. 9 - Prob. 23RQCh. 9 - Prob. 24RQCh. 9 - Prob. 25RQCh. 9 - Prob. 26RQCh. 9 - Prob. 27RQCh. 9 - Prob. 28RQCh. 9 - Prob. 29QRACh. 9 - Prob. 30QRACh. 9 - Prob. 31QRACh. 9 - Prob. 32QRACh. 9 - Prob. 33QRACh. 9 - Prob. 34QRACh. 9 - Prob. 35QRACh. 9 - Prob. 36QRACh. 9 - Prob. 37AOQCh. 9 - Prob. 37BOQCh. 9 - Prob. 37COQCh. 9 - Prob. 37DOQCh. 9 - Prob. 37EOQCh. 9 - Prob. 37FOQCh. 9 - Prob. 37GOQCh. 9 - Prob. 37HOQCh. 9 - Prob. 37IOQCh. 9 - Prob. 37JOQCh. 9 - Prob. 37KOQCh. 9 - Prob. 37LOQCh. 9 - Prob. 38OQCh. 9 - Prob. 39OQCh. 9 - For each term in the first column below, identify...Ch. 9 - Prob. 41OQCh. 9 - Smith, Inc. Rachel Robertson wishes to use...Ch. 9 - Prob. 43OQCh. 9 - Prob. 44PCh. 9 - Prob. 45PCh. 9 - Prob. 46PCh. 9 - Prob. 47PCh. 9 - In the audit of Potomac Mills, the auditors wish...Ch. 9 - Prob. 49PCh. 9 - Prob. 50PCh. 9 - Prob. 51PCh. 9 - Prob. 52ITC
Knowledge Booster
Similar questions
- Assume that an account with a recorded balance of $5,000 has an audited value of $3,000. By using monetary unit sampling, if the sampling interval is $1,500, the projected misstatement would bea. $600.b. $900.c. $2,000.d. $3,000.arrow_forwardAs was discussed in the Analytics in Action from Chapter 2, the U.S. Census Bureau is a leading source of quantitative data related to the people and economy of the United States. The crosstabulation below represents the number of households (1,000s) and the household income by the highest level of education for the head of household (U.S. Census Bureau web site, 2013). Use this crosstabulation to answer the following questions. a. Develop a joint probability table. b. What is the probability the head of one of these households has a masters degree or higher education? c. What is the probability a household is headed by someone with a high school diploma earning 100,000 or more? d. What is the probability one of these households has an income below 25,000? e. What is the probability a household is headed by someone with a bachelors degree earning less than 25,000? f. Are household income and educational level independent?arrow_forwardYou are the audit manager for Ken-Ron Enterprises. Your firm has been the entity’s auditor for 15 years. Your firm normally uses a range of 3% to 5% of income before taxes to calculate overall materiality and 50-75% of overall materiality to calculate tolerable misstatement. Ken-Ron has reported the following financial statement data (in millions) for the last four years: (Data shown in image) Required:a. If you planned on using income before taxes as the benchmark to compute overall materiality and tolerable misstatement, how would you compute those amounts for 2018? Prepare and justify your calculations.b. Determine overall materiality and tolerable misstatement using either total assets or total revenues as the benchmark. Make the calculations by utilizing both .25% and 2%, the endpoints of the range that your firm’s guidance provides.c. Assume that during the course of the 2018 audit you discovered misstatements totaling $50 million (approximately 50% of the 2018 income before…arrow_forward
- For the following independent situations, assume that you are the audit partner on the engagement: 1. The client recorded impairment of goodwill for $40,000 last year. It recorded reversal of impairment in goodwill for $20,000 this year after considering the carrying amount and recoverable amount of the cash generating unit. Net income is $10,000 in current year. Discuss the most appropriate type of opinion the auditor should issue. Explain briefly the reason for the opinion.arrow_forwardThe 1,500 accounts receivable of DEF Company have a total book value of $30,000. Bob Smith, Certified Public Accountant (CPA), has selected and audited a sample of 50 accounts with a total book value of $1,050. Using the difference estimation technique, Smith has properly estimated a projected misstatement of an overstatement of $3,000 for the entire population. The total audited value of Smith's sample is: Multiple Choice $900 $1,150 $850 $950arrow_forwardA. Based on the above and the result of your audit, answer the following(Round off present value factors to four decimal places and final answers to nearest hundred) 1. The consultation service fee revenue that should be recognized in 2022 isarrow_forward
- What is the audited net sales balance? A. 9,810,000 B. 10,350,000 C. 10,890,000 D. 10,980,000arrow_forwardThe 1,000 accounts receivable of Gamco Company have a total book value of $20,000. Wilbur Schneitz, Certified Public Accountant (CPA), has selected and audited a sample of 50 accounts with a total book value of $900. Using nonstatistical variables sampling and the difference estimation technique, Smith has properly estimated a projected misstatement of an overstatement of $3,000 for the entire population. The total audited value of Schneitz’s sample is: 650 1000 750 900arrow_forwardYou are auditing accounts receivable for a small company and have found the following results: Number and Size of Client Accounts Book Value of Stratum Book Value of Sample Audit Value of Sample 1,202 accounts < $1,000 $ 1,000,000 $ 75,000 $ 60,000 532 accounts > $1,000 $ 777,504 $ 36,400 $ 34,400 Use ratio projection to project your results. Show your final results. and label appropriately.arrow_forward
- The data below is the sales of MGM Co. The accountant of the company hasprovided you with the following data as well as his computed balance ofP2,350,000 as the gross sales of the company. As the external auditor of thefirm, you are tasked to compute whether the gross sales presented to you isunderstated or overstated as compared to your audited amount. How much isthe understatement or overstatement? (Place 0 if there is no misstatement. If theamount represents an overstatement, place a - sign before the amount. No needto provide description.)arrow_forwardSoCal Edison reported the following data for operating revenue and net income for 2001 through 2005. Year Operating Revenue (Millions), X Net Income (Millions), Y 2001 2270 96.9 2002 1482 89.1 2003 2138 103.9 2004 2260 81.6 2005 2600 78.1 Using Excel, determine the least-squares regression line and interpret its slope. Estimate the net income if the operating revenue figure is $2500 million.arrow_forwardThe audited financial statements for New Life Manufacturing for year-end December 31, 2022,show an accounting profit after tax of $16,500,000 after charging the following:• Depreciation $2,500,000`• Tax for the year $500,000• Property Tax $1,000,000• Interest expense $15,000• Preference dividends of $40,000• Legal fees $1,110,000• Insurance of $750,000• Bad debts $40,000• Foreign Travel $20,000• Repairs and Maintenance $1,500,000• General expenses $600,000Other Information1. Property Tax of $600,000 was paid for the property on which the company’s factory islocated; $300,000 for the office premises and $100,000 for the CEO’s home.2. The insurance was paid for the factory and office premises.3. Loss on disposal of fixed assets $350,0004. Income Tax Refund of $700,000 was included as part of the entity’s income.5. The bad debt expense includes a general provision of $10,000 and a specific provision of$30,000.6. The company paid final ordinary dividends totaling $100,000.7. Repairs and…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning