variable sampling

Question 1

variable sampling def

Answer 1

taking a sample to assess an item’s dollar amount ($’s)

relies on normal distribution-bell curve
decide how sample will be selected-normally use statistical sampling where each unit has the same chance of selection

Question 2

must calculate sample size-4 factors

Answer 2

estimated population standard deviation (variability)

tolerable misstatement (precision)-also called the allowance for sampling risk

risk of incorrect acceptance (type 2, related to confidence)

population size-now considered explicity

Question 3

5 factors that affect sample size for variable sampling

Answer 3

variability of population-direct

tolerable misstatement (related to precision)-inverse

risk of incorrect acceptance(1-confidence)type2-inverse

population size-explicit-direct

risk of incorrect rejection-type 1-implicit-inverse

Question 4

stratification

Answer 4

breaking the population into several groups of relatively similar items (eg small medium and large items)

this may reduce the overall variability and thereby reduce the total sample size

Question 5

3 approaches to classical variable sampling

Answer 5

difference estimation

ratio estimation

Question 6

difference estimation

Answer 6

estimate the populations value by focusing on the difference between sample items audit value and their book value.

Question 7

ratio estimation

Answer 7

estimate the populations value by focusing on the ratio between sample items audit value and their book value

Question 8

mean per unit estimation

Answer 8

estimate the populations audit value by first calculating the samples audit value

Question 9

purpose of stratification is to reduce

Answer 9

variability