After reading the material in this chapter, you should be able to: Define variables sampling and understand when it is used in the audit, understand the basic process underlying monetary unit sampling (MUS) and when to use it, identify the factors affecting the size of an MUS sample and calculate the sample size for an MUS application. | Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Module G Variables Sampling Learning Objectives Define variables sampling and understand when variables sampling is used in the audit. Understand the basic process underlying monetary unit sampling (MUS) and when to use it. Identify the factors affecting the size of an MUS sample and calculate the sample size for an MUS application. Evaluate the sample results for an MUS sample by calculating the projected misstatement, incremental allowance for sampling risk, and basic allowance for sampling risk. Understand the basic process underlying classical variables sampling and the use of classical variables sampling in an audit. Understand the use of nonstatistical sampling for variables sampling. Mod G- Variables Sampling Used to estimate the amount (or value) of a population Substantive procedures Types of variables sampling approaches Monetary unit sampling (MUS) Classical variables sampling Mod G- Monetary Unit Sampling (MUS) Defines the sampling unit as individual dollar (or Euro, Yen, Yuan, etc.) in an account balance Auditor will select individual dollars for examination Auditor will verify entire “logical unit” containing the selected dollar Mod G- When to use MUS ADVANTAGES OF MUS DISADVANTAGES OF MUS Mod G- Major Steps in Variables Sampling: Planning Determine the objective of sampling Define characteristic of interest Define the population Mod G- Major Steps in Variables Sampling: Performing Determine sample size Select sample items Measure sample items Mod G- Using AICPA MUS Tables Ratio of Expected to Tolerable Misstatement Tolerable Misstatement as a Percentage of Population Find appropriate Risk of Incorrect Acceptance Find Appropriate Ratio of Expected to Tolerable Misstatement Read across to “Tolerable Misstatement as a Percentage of Population” column Mod G- Major Steps in Variables Sampling: Evaluating Evaluate . | Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Module G Variables Sampling Learning Objectives Define variables sampling and understand when variables sampling is used in the audit. Understand the basic process underlying monetary unit sampling (MUS) and when to use it. Identify the factors affecting the size of an MUS sample and calculate the sample size for an MUS application. Evaluate the sample results for an MUS sample by calculating the projected misstatement, incremental allowance for sampling risk, and basic allowance for sampling risk. Understand the basic process underlying classical variables sampling and the use of classical variables sampling in an audit. Understand the use of nonstatistical sampling for variables sampling. Mod G- Variables Sampling Used to estimate the amount (or value) of a population Substantive procedures Types of variables sampling approaches Monetary unit sampling (MUS) Classical variables sampling
