An auditor is preparing to sample an entity's customer receivables for overstatement. A statistical sampling method that automatically provides stratification when using systematic selection is:
A)attribute sampling.
B)ratio-estimation sampling.
C)monetary-unit sampling.
D)mean-per-unit sampling.

Question

Quizplus · Accepted Answer

Monetary-unit sampling is the only sampling method listed that automatically provides stratification when using systematic selection. This method involves selecting individual monetary units, rather than customer accounts, which naturally stratifies the population based on the size of the monetary units. This can be helpful in identifying overstatements in larger balances, which may be more material to the financial statements. Therefore, monetary-unit sampling is the best choice for a sampling method that provides stratification when sampling customer receivables for overstatement.

An Auditor Is Preparing to Sample an Entity's Customer Receivables