In auditing a firm’s financial statements, an auditor is required to assess the operational effectiveness of the accounting system. In performing the assessment, the auditor frequently relies on a random sample of actual transactions (Stickney and Weil, Financial Accounting: An Introduction to Concepts, Methods, and Uses, 2002). A particular firm has 5,382 customer accounts that are numbered from 0001 to 5382.
a. One account is to be selected at random for audit. What is the probability that account number 3,241 is selected?
b. Draw a random sample of 10 accounts and explain in detail the procedure you used.
c. Refer to part b. The following are two possible random samples of size 10: