The following apply to statistical sampling. Choose the most appropriate response.

a. Which of the following best describes the distinguishing feature of statistical sampling ?

i. It requires the examination of a smaller number of supporting documents.

ii. It provides a means for measuring mathematically the degree of uncertainty that results from examining only part of a population.

iii. It reduces the problems associated with the auditor’s judgment concerning materiality.

iv. It is evaluated in terms of two parameters: statistical mean and random selection.

b. Which of the following is an advantage of systematic sampling over random number sampling?

i. It provides a stronger basis for statistical conclusions.

ii. It enables the auditor to use the more efficient sampling-with-replacement tables.

iii. There may be correlation between the location of items in the population, the feature of sampling interest, and the sampling interval.
iv. It does not require establishment of correspondence between random numbers and items in the population.

c. In performing a review of his client’s cash disbursements, a CPA uses systematic sampling with a random start. The primary disadvantage of systematic sampling is that population items:
i.Must be reordered in a systematic pattern before the sample can be drawn.
ii. May occur in a systematic pattern, thus negating the randomness of the sample.
iii. May occur twice in the sample.
iv. Must be replaced in the population after sampling to permit valid statistical inference.