Module IV – MUS Sampling Factory Equipment Additions
What is the objective of performing the test of factory equipment expenditures? What is the population? What is the sampling unit?
What factors did derrick consider in setting these parameters?
Evaluate the sampling results. Do they support Derrick’s concerns regarding possible material misstatement? Note the audit adjustment based on misstatements discovered while examining the sample. Is this adjustment adequate to bring the population into acceptable bounds? If not, what alternate actions might you choose to pursue, based on the sampling results?