Author Question: When the sample selection is done using probability proportional to size sample selection (PPS), (Read 98 times)

haydenjmcm · **on:** Aug 21, 2022

Question 1

Using statistical sampling to assist in verifying the year-end accounts payable balance, an auditor has accumulated the following data:

	Number of accounts	Book balance	Balance determined by the auditor
Population:	4,000	$5,000,000	?
Sample:	200	$250,000	$300,000

Projecting the misstatement to the population, the auditor's estimate of year-end accounts payable balance would be
◦ $5,050,000.
◦ $5,125,000.
◦ $6,000,000.
◦ $6,150,000.

Question 2

When the sample selection is done using probability proportional to size sample selection (PPS),
◦ the actual number of units selected for testing may be more than the computed sample size.
◦ the auditor must use systematic selection, rather than random selection of dollars.
◦ population items with a zero recorded balance have no chance of being selected.
◦ negative balances must be treated as positive balances.

annaelena92 · **Reply #1 on:** Aug 21, 2022

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