“When using a systematic sample selection technique with PPS sampling, every account larger than the sampling interval will automatically be included in the sample.” Do you agree? Explain.
Answer to relevant QuestionsWhen using PPS sampling, do auditors select sample items based on individual dollars, audit individual dollars, or both?In a probability-proportional-to-size sample with a sampling interval of $20,000, an auditor discovered that a selected account receivable with a recorded amount of $10,000 had an audit amount of $2,000. Calculate the ...During your reconciliation of bank accounts in an audit, you find that a number of checks for small amounts have been outstanding for more than a year. Does this situation call for any action by the auditor? Explain.If a security or derivative is not marketable, how do the auditors typically obtain evidence about the fair value of the instrument?During the current year, the management of Hanover, Inc., entered into a futures contract to hedge the price of silver that will be needed for next year’s production. The contract, which is held by Hanover’s commodity ...
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