probability proportionate to size

Question 1

pps sampling def

Answer 1

pps sampling defines the sampling unit to be an individual dollar associated with the individual f/s element involved. ex assume ar has 7500 accounts with 3m total. the sample size will be looked at as 3m

variations
monetary unit sampling
dollar unit sampling

Question 2

advantage of pps

Answer 2

efficiency

if there are few differences between audit and book value then pps may result in smaller sample sizes

Question 3

disadvantages of pps

Answer 3

does not work well in auditing negative balances (understatements) or zero balances