Problem

Which of the following statements is not correct if the actual misstatement is $1,000, the...

Which of the following statements is not correct if the actual misstatement is $1,000, the upper limit on misstatement is $10,000, and the tolerable misstatement is $12,000?

A. There is a (1 minus the risk of incorrect acceptance) probability that the true misstatement in the account balance exceeds $10,000.

B. The allowance for sampling risk is $9,000.

C. There is a (1 minus the risk of incorrect acceptance) probability that the true misstatement in the account balance is less than $10,000.

D. The account balance appears to be fairly recorded.

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