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Requirements
1. What is the objective of performing this test? What is the sampling unit?
What is the population?
2. Using the spreadsheet program and downloaded data, retrieve the file
labeled “MUS.” Locate the following documentation in the file:
• WP 11.3A—Monetary unit sampling plan;
• WP 11.3B—Monetary unit sampling plan—projected misstatement; and
• WP 11.3C—Monetary unit sampling plan—computed precision and
upper misstatement limit.
Scroll to WP 11.3A, “Monetary Unit Sampling Plan.” Calculate sample size
and sampling interval assuming Derick has set the following parameters:
Risk of incorrect acceptance: 5%
Anticipated misstatement: $100,000
Tolerable misstatement: $640,000
3. What factors did he consider in setting these parameters? Print the document.
4. Scroll to WP 11.3B, “Monetary Unit Sampling Plan—Projected
Misstatement.” This document summarizes all invoices containing posting
errors and calculates the projected misstatement. Note the equations that
have been incorporated into the document template.
a. What factor determines whether a “tainting percentage” appears in column 4?
b. Print the document. (Compress print size or otherwise accommodate
a wide document.)
5. Scroll to WP 11.3C, “Monetary Unit Sampling Plan—Computed Preci-
sion and Upper Misstatement Limit.” Complete the “Incremental
801
Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
802 C ha p te r 1 4 Au di t of L on ge r-Term Li ab i li tie s, E qu ity, A cq ui si ti o ns
Requirements
1. Using the spreadsheet program and downloaded data, retrieve the file labeled
“Warranty.” Examine the document carefully and comment on its adequacy
and completeness. (Note that the 12/31/08 audited balances appear to be
unreasonable because you have not yet selected an appropriate provision per-
centage based on the “data from client-prepared analysis of warranty claims.”)
2. Scroll to the bottom of WP 20 and enter audit adjustments already made in
previous modules that affect cost of goods sold for 2009. You should iden-
tify the following adjustments. (If you weren’t assigned the respective mod-
ules, ask your instructor for details regarding amounts and accounts.)
• AJE No. 1 (Module IV correction of repairs expense capitalized as factory
equipment); and
• AJE No. 3 (2009 purchase recorded in 2010, detected in completing
Module VI).
Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.