Below Are Some Situations in Which It Would Be Preferable

question 85

Short Answer

Below are some situations in which it would be preferable to use either monetary unit sampling or classical variables sampling.Using the letters M (for monetary unit sampling)or C (for classical variables sampling).
1___.Several sampling units in the population have a zero or negative balance.
2___.The auditor would like to examine a smaller number of items.
3___.The account balance is susceptible to understatement error.
4___.The account balance includes a few logical units with very large dollar balances.
5___.The auditor is able to form a reasonable estimate of the variability of the population.
6___.The auditor would like to ensure that the sampling method provides a conservative (higher)estimate of misstatement in the account balance.
7___.The account balance is susceptible to overstatement error.

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