PPS Sampling: Projected Misstatements / Tainted Calculation - when to use:

(i) For accounts having a book value greater than or equal to the sample interval, the actual misstatement should be used to determine the “projected misstatement.” (ii) For accounts having book values less than the sample interval, the auditor would have to apply the “tainting percentage” to the sample interval from which that account was selected. Suppose that the sample interval is $2,000 and that an account having a book value of $250 has an audit value of $200. The “tainting” is $50/$250 = .20; and, since the account's book value is less than the sample interval, the projected misstatement for this account would be .20 × $2,000 = $400. (iii) When there are no misstatements in the sample, the projected misstatement is zero.