1. In evaluating the results of the sample in the PPS method, the auditor calculates an upper misstatement limit (UML) from the sample data and compares it with the tolerable misstatement specified in designing the sample.
Discuss the following:
(a) What are the factors involved in calculating the UML?
(b) What do tainting age and basic precision mean?
(c) What courses of actions might an auditor take if the UML exceeds tolerable misstatement?
(d) Are these options available when using non-statistical sampling and the sample evaluation indicates a possible material misstatement in the population?
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