You are deciding which statistical sampling method to use. Indicate which of the methods described in this chapter is most appropriate in each of the following circumstances. Explain your answer.

Required:

a. Your client uses standard cost to approximate FIFO valuation. You expect frequent but not material differences and desire to select random items to test. You expect the sizes of the misstatements to have a high correlation to the related book values.

b. Same as part

a, except you do not expect there to be a close correlation of the size of misstatements to the related book values.

c. Your audit objective is to determine whether inventory is materially overstated;
you do not expect many misstatements, and you desire to select the sample based on dollars.
d.Your audit objective is to determine whether inventory is fairly stated. There is very little variability in the extended values of the inventory items. You do not expect many misstatements and desire to select random items to test.