Question: In using difference estimation, an auditor took a random sample of 100 inventory items from a large population to test for proper pricing. Several of

In using difference estimation, an auditor took a random sample of 100 inventory items from a large population to test for proper pricing. Several of the inventory items were misstated, but the combined net amount of the sample misstatement was not material. In addition, a review of the individual misstatements indicated that no misstatement was by itself material. As a result, the auditor did not investigate the misstatements or make a statistical evaluation. Explain why this practice is improper?

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