You are planning to use monetary unit sampling (MUS) to evaluate Violet Company’s accounts receivable. The accounts receivable account totals $3,000,000. You have assessed a risk of incorrect acceptance of 5 percent, a tolerable misstatement of $120,000, and an expected error of $24,000.
a. Calculate the sample size and sampling interval.
b. Regardless of your answer to (a), use a sample size of 125 and the related sampling interval and calculate the upper limit on misstatement, assuming that you found the following differences.
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