Problem

The following are descriptions of the way that key parameters are determined in a monetary...

The following are descriptions of the way that key parameters are determined in a monetary unit sampling (MUS) plan. Using the correct letter, indicate which parameter is most closely associated with the description. Each parameter is associated with only one description.

1. Determined based on the recorded amount of the account balance or class of transactions

     Expected error 

  ____ 

2. Estimated based on prior audits or a pilot sample of current balances

     Population size 

  ____ 

3. Determined judgmentally by the auditor based on the overall financial statement materiality

     Sample size 

  ____ 

4. Calculated by dividing the recorded balance by the amount of actual misstatement detected

     Tolerable misstatement 

  ____ 

5. Calculated as the difference between the recorded value and the audited value of a logical unit comprising an account balance or class of transactions

     Tainting percentage 

  ____ 

6. Determined based on tolerable misstatement, expected error, and the risk of incorrect acceptance

     Actual misstatement 

  ____ 

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