Hill has decided to use probability-proportional-to-size

(PPS) sampling, sometimes called dollar-unit sampling, in the audit of a client’s accounts receivable balances. Hill plans to use the following PPS sampling table:

TABLE Reliability Factors for Overstatements Number of over- Risk of incorrect acceptance statements 1% 5% 10% 15% 20%

0 4.61 3.00 2.31 1.90 1.61 1 6.64 4.75 3.89 3.38 3.00 2 8.41 6.30 5.33 4.72 4.28 3 10.05 7.76 6.69 6.02 5.52 4 11.61 9.16 8.00 7.27 6.73 Additional information Tolerable misstatements

(net of effect of expected misstatements) $ 24,000 Risk of incorrect acceptance 20%

Number of misstatements 1 Recorded amount of accounts receivable $240,000 Number of accounts 360 What sample size should Hill use?

a. 120

b. 108

c. 60

d. 30