How Does Monetary Unit Sampling (MUS)ensure That Larger Dollar Components

question 89

Multiple Choice

How does monetary unit sampling (MUS) ensure that larger dollar components are selected for examination?

• A) It requires the auditor to identify all items having a balance higher than performance materiality prior to beginning the sample selection process.
• B) It requires the auditor to stratify the sample into larger and smaller dollar components prior to beginning the sample selection process.
• C) It defines the sampling unit as an individual dollar within an account balance or class of transactions.
• D) It selects components having large balances in the prior audit.

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Definitions:

Variable Inputs

Factors of production that change in quantity as the level of output changes, such as labor or raw materials, in contrast to fixed inputs like machinery or land.

Property Resources

Assets or materials owned by individuals or entities, including land, buildings, and intellectual property, used in the production of goods and services.

Labor

The human effort, either physical or mental, used in the production of goods and services.

Curves

In economics, curves are graphical representations that show the relationship between two variables, demonstrating how one variable changes in response to the other.