Skip to content

ACCA Strategic Professional · Advanced Audit and Assurance (International) · Audit procedures and obtaining evidence

Fenwick & Co is auditing the trade receivables of Zora Retail. The audit team plans to select 60 balances using monetary unit sampling. Which statement correctly describes how monetary unit sampling affects the likelihood of an item being selected?

Under monetary unit sampling each currency unit is a sampling unit, so larger balances contain more units and are more likely to be selected. This makes the method naturally weighted towards high-value items and suits testing for overstatement, unlike item-based random selection where each balance has an equal chance.

  1. AEach balance has an equal chance of selection regardless of its size
  2. BLarger balances have a greater chance of selection because each currency unit is a sampling unitCorrect
  3. CSmaller balances have a greater chance of selection because they are more numerous
  4. DSelection is made only from balances the auditor considers high risk

Explanation

In monetary unit sampling, every currency unit in the population is a sampling unit, so a balance containing more units is more likely to be hit. This naturally gives larger items greater selection probability. Option 0 describes simple random selection by item, not monetary unit sampling.

Did you get it right without looking?

One question tells you little. A timed set on Audit procedures and obtaining evidence shows your real accuracy, how long you take and where you lose marks.

Practise Audit procedures and obtaining evidenceFree diagnostic mock

More Audit procedures and obtaining evidence questions