Nandini has just completed the accounts receivable confirmation process in the audit of Danforth Paper Company Ltd., a paper supplier to retail shops and commercial users.
Following are the data related to this process:
Accounts receivable recorded balance..............................$2,760 000
Number of accounts..........................................................7 320
A nonstatistical sample was taken as follows:
All accounts over $10 000 (23 accounts)..............................$465 000
77 accounts under $10 000)....................................................$81 500
Materiality)............................................................................$100 000
Inherent and control risk are both high. No relevant analytical procedures were performed. The table below gives the results of the confirmation procedures.

REQUIRED
a. What type of nonstatistical sampling method would Nandini have used? Justify your response.
b. Explain the advantages and disadvantages of using stratified sampling for the Danforth Paper Company Ltd. sample selection.
c. If statistical sampling were used, which method would be used? Justify your response.
d. Describe the process that would be used to evaluate the results of the nonstatistical sample. Consider both the direct implications of the misstatements found and the effect of using a sample.

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Recorded Value Audited Value Items over $10 000 $465 000 $432 000 tems under $10 000 81 500 77 150 tems under $10000 tem 12 tem 19 tem 33 tem 35 tem 51 tem 59 Item 74 5 120 4 820 250 3 975 1 850 4 200 2 405 19 285 250 3 875 1 825 3 780 14 935