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Unrestricted Random Sampling Without Replacement

9-38.

The 10 following statements apply to unrestricted random sampling without replacement. Indicate whether each statement is true or false. Briefly discuss each false statement.

a. When sampling from the population of accounts receivable for certain objectives, the auditor might sample only active accounts with balances

b. To be random, every item in the population must have an equal chance of being selected for inclusion in the sample.

c. In general, all items in excess of a material misstatement need to be examined and sampling of them is inappropriate.

d. It is likely that five different random samples from the same population could produce five different estimates of the true population mean.

e. A 100 percent sample would have to be taken to eliminate sampling risk.

f. The effect of the inclusion by chance of a very large or very small item in a random sample can be lessened by increasing the size of the sample.

g. The standard deviation is a measure of the variability of items in a population.

h. The larger the standard deviation of a population, the smaller the required sample size.

i. Unrestricted random sampling with replacement may result in a larger sample size than unrestricted random sampling without replacement.

j. Unrestricted random sampling normally results in a smaller sample size than does stratified sampling.

Solution Preview

Below you will find assistance on the auditing questions as posted.

9-38.
The 10 following statements apply to unrestricted random sampling without replacement. Indicate whether each statement is true or false. Briefly discuss each false statement.

a. When sampling from the population of accounts receivable for certain objectives, the auditor might sample only active accounts with balances

TRUE - This depends on the objectives however. If they are testing for reasonableness and validity of $0 balances, they could sample for inactive accounts without balances to ...

Solution Summary

The solution discusses unrestricted random sampling without replacement.

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