Question $1(3$ points$)$

You have recently been hired as an audit trainee with a public accounting firm. Lancaster Manufacturing is a new client for the firm, and you have been assigned to select the sample for a test of sales shipments over the year. The operations and the industry environment of Lancaster are very similar to another client that you are very familiar with.

All shipments to customers are entered in the shipping log by the shipping clerk. There were approximately $5,000$ shipments over the past year. Three major clients account for $10\%$ of the shipments that make up $75\%$ of the value of sales for the year.

You are aware of that there are two possible approaches$-$ statistical sampling, and judgmental sampling.

Required:

Which sample approach will you adopt for this assignment? Why?

Your audit objective is to test sales$-$ completeness and accuracy. What will be your population from which you will draw your sample?