Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 17, Problem 13RQ
To determine
Determine the meaning of the statement.
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Students have asked these similar questions
The accounting department reports the accounts receivable balance as $175,000.You are willing to accept that balance if it is within $15,000 of the actual balance.Using a variables sampling plan, you compute a 95% confidence interval of $173,000to $187,000. You would therefore(1) find it impossible to determine the acceptability of the balance.(2) accept the balance but with a lower level of confidence.(3) take a larger sample before rejecting the sample and requiring adjustments.(4) accept the $175,000 balance because the confidence interval is within themateriality limits.
You are testing your client's allowance, recorded at $1,500,000, with a monetay unit sample. The
following results are at a 2-sided confidence level of 90%.
Lower confidence limit
$1,200,000 uncollectible
Upper confidence limit
$1,900,000 uncollectible
Max. tol. misstatement:
$500,000
The client already has a previously recognized a $1.500.000 allowance for uncollectibles
recorded.
Which of the following would be a materially correct DR or CR adjustment amount?
a.
DR Allowance $500,000
CR Allowance $500,000
No adjustment needed.
CR Allowance
$1,550,000
b.
d:
a risk manager gathers the following sample data to analyze annual returns for an asset: 12%, 25% and -1%. he wants to compute the best unbiased estimator of the true population mean and standard deviation. the manager's estimate of the standard deviation for this asset should be closest to
a. 0.0111
b. 0.0113
c. 0.1054
d. 0.1204.
Chapter 17 Solutions
Auditing And Assurance Services
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