Probability-proportional-to-size (PPS) sampling is used by internal auditors to reach conclusions regarding monetary amounts.
a. Describe the situation in which the application of PPS sampling is most applicable.
b. Explain how a PPS sample should be selected.
c. Identify the factors that affect PPS sample size. Indicate the effect each factor has on sample size.
d. Discuss the advantages and disadvantages of PPS sampling relative to classical variables sampling that an internal auditor must consider when deciding which of the two approaches is best for a particular sampling application.