Which of the following most likely would be an advantage in using classical variables sampling rather than probability-proportional-to-size (PPS) sampling? Show
Probability-proportional-to-size (PPS) sampling excludes zero and negative balances in its sample selections and in evaluating results. Therefore, classical variables sampling would have an advantage over PPS sampling because variables sampling does not require special design considerations for inclusion of zero and negative balances. That is, PPS sampling would require a special design to include negative and zero balances while variables sampling would not.
June 09, 2022/ Steven Bragg
Monetary unit sampling (MUS) is a statistical sampling method that is used to determine if the account balances or monetary amounts in a population contain any misstatements. Each
individual dollar in the population is considered a sampling unit, so that account balances or amounts in the population with a higher value have a proportionally higher chance of being selected. Once the testing of a sample has been completed, a conclusion is reached in dollar amounts, rather than the rate of occurrence of misstatements. MUS methods are relatively simple to use, and so can be an efficient tool
for audit testing. MUS advantages include the following: It is easier to apply than classical variables sampling. There is no need to consider the characteristics of the population when determining sample sizes, such as the standard deviation of dollar amounts within the population. The stratification of a population is not needed, since
samples are automatically selected in proportion to their dollar amounts. If no misstatement is expected, the sample size is quite efficient. An MUS can be used for tests of controls, where it provides information about the proportion of dollars being processed by the controls under review. Problems with Monetary Unit SamplingMUS methods are especially applicable when making selections for accounts receivable confirmations, loan receivable confirmations, inventory price tests, and fixed asset addition tests. Despite these advantages, MUS is not perfect. It is subject to the following problems:
Given these concerns, MUS methods are less applicable when making selections for receivable confirmations where there are many unapplied credits and inventory test counts where there may be a number of under- and over-statements. Which of the following characteristics most likely would be an advantage of using classical variables sampling rather than probability-proportional-to-size (PPS) sampling? B. The auditor need not consider the preliminary judgments about materiality. C. The sampling process can begin before the complete population is available. D. The sample will result in a smaller sample size if few errors are expected. CPA Auditing and Attestation You can start the exam to practice all questions related to this exam. Question No. 1 Which of the following most likely would be an advantage in using classical variables sampling rather than probability-proportional-to-size (PPS) sampling? Choose the correct option from the given list. An estimate of the standard deviation of the population's recorded amounts is not required. The auditor rarely needs the assistance of a computer program to design an efficient sample. Inclusion of zero and negative balances generally does not require special design considerations. Any amount that is individually significant is automatically identified and selected. 0 DiscussionsTrending ExamsWhich of the following is an advantage of classical variables sampling?Which of the following statements is an advantage of classical variables sampling? If no errors are expected, classical variables sampling will result in a smaller sample size than probability-proportional-to-size sampling. A classical variables sampling plan can begin before the completed population is available.
Which of the following characteristics most likely would be an advantage of using probabilityWhich of the following characteristics most likely would be an advantage of using probability-proportional-to-size (PPS) sampling rather than classical variables sampling? It is particularly effective for detecting understatements.
What is classical variable sampling?Classical variables sampling is a statistical sampling method for estimating: the total audited value of an account or class of transactions. the total amount of monetary misstatement in an account or class of transactions.
Which of the following is a characteristic of Nonstatistical sampling?Which of the following is a characteristic of nonstatistical sampling? It requires judgment to select a sample. An advantage of using statistical over nonstatistical sampling methods in tests of controls is that the statistical methods: provide an objective basis for quantitatively evaluating sample risk.
|
Which of the following would most likely be an advantage in using classical variable sampling rather than probability proportional to size sampling?
Urheberrechte © © 2024 IlerngutCOM Inc.
