$17-26($Objectives $17-3,17-4,17-5)$ The following relate to the use of statistical sampling

for tests of details of balances. For each one, select the best response.

a $.$ When the auditor uses monetary unit statistical sampling to examine the total

dollar value of invoices, each invoice

$(1)$ has an equal probability of being selected.

$(2)$ can be represented by no more than one monetary unit.

$(3)$ has an unknown probability of being selected.

$(4)$ has a probability proportional to its dollar value of being selected.

b $.$ Which of the following would be an advantage of using variables sampling rather

than probability$-$proportional$-$to$-$size $($PPS$)$ sampling?

$(1)$ An estimate of the standard deviation of the population$$s recorded amount is

not required.

$(2)$ The auditor rarely needs the assistance of a computer program to design an

efficient sample.

$(3)$ The inclusion of zero and negative balances usually does not require special

design considerations.

$(4)$ Any amount that is individually significant is automatically identified and

selected.

c $.$ In applying variables sampling, an auditor attempts to

$(1)$ estimate a qualitative characteristic of interest.

$(2)$ determine various rates of occurrence for specified attributes.

$(3)$ discover at least one instance of a critical deviation.

$(4)$ predict a monetary population value within a range of precision.