Question

In a monetary-unit sample with a sampling interval of $10,000, an auditor discovered that a selected account receivable with a recorded amount of $5,000 had an audit amount of $2,000. The projected misstatement of this sample was:

1) $3,000
2) $4,000
3) $6,000
4) $8,000

Answer 1

In a monetary-unit sample with a sampling interval of $10,000, when an account receivable recorded at $5,000 is actually worth $2,000, the projected misstatement is $6,000.

Step-by-step explanation:

The student's question is about calculating the projected misstatement in a monetary-unit sampling scenario performed during an audit. The auditor has found an account receivable that was recorded at $5,000 but the actual audited amount is $2,000, hence a misstatement of $3,000. The sample has a sampling interval of $10,000. To project this misstatement to the population, you multiply the misstatement ($3,000) by the sampling interval ($10,000), and then divide by the book value ($5,000).

Projected Misstatement = ($3,000 misstatement x $10,000 sampling interval) / $5,000 book value = $6,000.

Therefore, the correct answer is 3) $6,000.