In statistical or nonstatistical sampling methods used in substantive testing,an auditor most likely would stratify a population into meaningful groups if
A) monetary-unit sampling (MUS) is used.
B) the population contains both very high and very low recorded amounts.
C) the auditor's estimated tolerable misstatement is extremely small.
D) the standard deviation of recorded amounts is relatively small.

Question

Quizplus · Accepted Answer

Stratifying a population into meaningful groups is most useful when a population contains significant variations in recorded amounts, such as when it contains both very high and very low recorded amounts. This allows the auditor to focus on the high-risk areas and sample disproportionately from those groups. Stratification is less useful when there is little variation in recorded amounts or when using MUS, which does not rely on stratification. Estimating tolerable misstatement or considering the standard deviation of recorded amounts does not necessarily correlate with the need for stratification.

In Statistical or Nonstatistical Sampling Methods Used in Substantive Testing,an