What would be the appropriate allowance for sampling risk

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Reference no: EM133344279

Question: Chatterton & Peecher LLP, external audit firm has decided to use monetary-unit sampling in the audit of Raptor Inc's accounts receivable. Raptor's recorded value of accounts receivable is $6 million. Tolerable overstatement is $240,000 and tolerable understatement is $480,000. The desired confidence is 90%. The expected misstatement is $30,000. However, if there were a misstatement, Chatterton & Peecher conservatively assume the tainting would be 100%. Assume that no misstatements are found as a result of the MUS audit procedures and that the appropriate procedures were completed. What would be the appropriate allowance for sampling risk (i.e., statistical precision)?

Reference no: EM133344279

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