Owing to economical sample sizes and ease of application, probability-proportional to-size (PPS) sampling has become the most widely used statistical sampling plan in practice today, even by local practitioners, some of whom had been reluctant to apply the more cumbersome classical variables sampling plans. Applications in practice range from inventory valuation in single site retail stores to elaborate receivables confirmation plans for user fees, property taxes, and gaming receipts in state government.

Required: 

Select an AICPA Audit & Accounting Guide for an industry (e.g., airlines, banks, casinos, colleges and universities, construction contractors, finance companies, investment companies, property and liability insurance companies, providers of health care services, or state and local governmental units). Draft a PPS sampling plan that could be applied to a financial statement account the guide leads you to believe is characteristic of the industry, such as third-party reimbursements in the health care industry or frequent-flier liabilities in the airline industry.