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ACCA Applied Knowledge · Management Accounting · Sampling methods

A factory produces items in batches, and a machine fault causes a defect in exactly every 10th item. An auditor uses systematic sampling with a random start, selecting every 10th item from the production line. What is the main risk of this approach?

The main risk is bias from periodicity. Systematic sampling is simple, but if the interval of 10 coincides with a regular pattern such as a defect in every 10th item, the sample will include all or none of the defects, giving a badly unrepresentative result.

  1. AThe sample cannot be chosen without a computer
  2. BThe sample may be heavily biased because the sampling interval coincides with the pattern in the populationCorrect
  3. CThe sample will always contain more items than simple random sampling
  4. DThe sample cannot be used for populations larger than 1,000 items

Explanation

Systematic sampling is simple and needs only a random start, but if the population has a periodic pattern matching the interval, the sample would contain either all or none of the defective items. Here every 10th item is selected, so the sample would be completely unrepresentative. The other options are not true limitations.

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