An auditor is preparing to sample a client's customer receivables for overstatement. A statistical sampling method that automatically provides stratification when using systematic selection (in that all items greater than the sample interval will be selected) is:
A) ratio-estimation sampling.
B) attribute sampling.
C) mean-per-unit sampling.
D) dollar-unit sampling.

Question

Quizplus · Accepted Answer

Dollar-unit sampling automatically provides stratification when using systematic selection. This method divides the population into monetary units and selects a random sample of those units, ensuring that larger dollar amounts have a higher probability of selection. This makes it an effective method for testing for overstatements in customer receivables. Ratio-estimation sampling, attribute sampling, and mean-per-unit sampling do not provide automatic stratification.

An Auditor Is Preparing to Sample a Client's Customer Receivables