Which of the following is an advantage of monetary unit sampling (MUS)?
A) It provides a conservative (higher) estimate of misstatement in the account balance or class of transactions.
B) Its samples typically include transactions or components reflecting relatively large dollar amounts.
C) It does not require the auditor to estimate the amount of misstatement in the account balance or class of transactions.
D) It is effective in identifying misstatements in accounts for which understatement is a primary concern (such as liabilities).

Question

Quizplus · Accepted Answer

Monetary unit sampling (MUS) selects sample items based on their dollar value, which means that the samples are more likely to include transactions or components reflecting relatively large dollar amounts. This makes the technique suitable for identifying material misstatements in the account balance or class of transactions. However, MUS does not provide a conservative estimate of misstatement (A) and it requires the auditor to estimate the amount of misstatement in the account balance or class of transactions (C). Additionally, MUS may be less effective in identifying misstatements in accounts for which understatement is a primary concern (such as liabilities), so D is not correct either.

Which of the Following Is an Advantage of Monetary Unit