Problem

The following are descriptions of components of the upper limit on misstatement. Using the...

The following are descriptions of components of the upper limit on misstatement. Using the correct letter, indicate which component is most closely associated with the description. Each component is associated with only one description.

1. Provides an estimate of the amount of misstatement that may exist in sampling intervals in which no misstatements were observed

     Basic allowance for sampling risk 

  ____ 

2. Determined by multiplying the projected misstatement by the incremental change in the reliability factor minus 1

     Projected misstatement 

  ____ 

3. Determined by multiplying the sampling interval by the tainting percentage

     Actual misstatement 

  ____ 

4. Determined by taking the difference between the recorded value and the audited value

     Incremental allowance for sampling risk 

  ____ 

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