Describe systematic sample selection and explain how an auditor will select

140

numbers from a population of

7,000

items using this approach.

A.

In systematic sampling, the auditor randomly selects items such that each population item has a known probability of being included in the sample. To select

140

numbers from a population of

7,000,

the auditor would use a haphazard sample selection method to generate the selection.

B.

In systematic sampling the auditor selects the first item in a block, and the remainder of the block is chosen in sequence. To select

140

numbers from a population of

7,000

the auditor can select the total sample of

140

by taking 4 blocks of

35

items, 10 blocks of

14,

20 blocks of

7,

or one block of

140.

C.

In systematic sampling, the auditor randomly selects items such that each population item has a known probability of being included in the sample. To select

140

numbers from a population of

7,000,

the auditor would use an electronic spreadsheet to generate the selection.

D.

In systematic sampling, the auditor calculates an interval and then methodically selects the items for the sample based on the size of the interval. The interval is set by dividing the population size by the number of sample items desired. To select

140

numbers from a population of

7,000,

the auditor divides

140

into

7,000

and gets an interval of

50.

He or she then selects a random number between 0 and

49.

What are the advantages of systematic sample selection? (Select all that apply.)

A.

This approach warrants a high probability of obtaining a nonrepresentative sample.

B.

This method is useful in situations where the nature of the data makes it more difficult to use a probabilistic method.

C.

In most populations a systematic sample can be drawn quickly.

D.

Systematic sampling is easy to use.

E.

This approach automatically puts the numbers in sequential order, and documentation is easy.

What are the disadvantages of systematic sample selection? (Select all that apply.)

A.

Systematic sampling has the possibility of bias.

B.

Systematically drawn samples have a higher likelihood of failing to obtain a representative sample.

C.

The auditor selects population items without regard to their size, source, or other distinguishing characteristics.

D.

Auditors must consider possible patterns in the population data that can cause sample bias.

E.

This method is less logical than other sample selection methods.