MONETARY UNIT SAMPLING Difference between Monetary Unit Sampling and Nonstatistical Sampling The Definition of the Sampling Unit Is an Individual Dollar The Population Size Is the Recorded Dollar Population Preliminary Judgment of Materiality Is Used for Each Account Instead of tolerable misstatement Sample size Is determined Using a Statistical Formula A Formal Decision Rule Is Used for Deciding the Accepta bility of the population Sample selection Is Done Using Probability Proportional to Size Sample Selection (PPS) C 2000 by Prentice Hall,Inc
Arens, Loebbecke; Auditing, 8/E © 2000 by Prentice Hall, Inc. MONETARY UNIT SAMPLING Difference between Monetary Unit Sampling and Nonstatistical Sampling • The Definition of the Sampling Unit Is an Individual Dollar • The Population Size Is the Recorded Dollar Population • Preliminary Judgment of Materiality Is Used for Each Account Instead of Tolerable Misstatement • Sample Size Is Determined Using a Statistical Formula • A Formal Decision Rule Is Used for Deciding the Acceptability of the Population • Sample Selection Is Done Using Probability Proportional to Size Sample Selection (PPS)
The auditor generalizes from the sample to the population Using Monetary Unit Sampling Techniques Attributes sampling tables are used to calculate the results 2. The attributes results must be converted to dollars 3. The auditor must make an assumption a bout the percentage of misstatement for each population item that is misstated 4. The statistical results when Monetary Units Sampling is used are called misstatement bounds Arens, Loeb becke: Auditing &/E C 2000 by Prentice Hall,Inc
Arens, Loebbecke; Auditing, 8/E © 2000 by Prentice Hall, Inc. The Auditor Generalizes from the Sample to the Population Using Monetary Unit Sampling Techniques 1. Attributes sampling tables are used to calculate the results. 2. The attributes results must be converted to dollars. 3. The auditor must make an assumption about the percentage of misstatement for each population item that is misstated. 4. The statistical results when Monetary Units Sampling is used are called misstatement bounds