L12 Notes_Part_18 - PPS Sampling problem PPS Sampling(20 points Boyd has decided to use probability-proportional-to-size(PPS sampling sometimes

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PPS Sampling problem PPS Sampling (20 points) Boyd has decided to use probability-proportional-to-size (PPS) sampling, sometimes calle d dollar-unit sampling, in the audit of a client’s accounts receivable balance. Boyd has evaluated the client’s internal control and anticipates that misstatements will be found in the account balance (still for planning purposes assume zero errors). Boyd plans to use the following PPS sampling tables: n = (BV x R * ETF)/[TM – (AM x EF)] I = BV/n Expansion factors for expected misstatements Acceptable Risk of Incorrect Acceptance (ARIA) Factor 1% 5% 10% 15% 20% 25% 30% 37% 50% 1.9 1.6 1.5 1.4 1.3 1.25 1.2 1.15 1.0 Reliability factors for misstatements of overstatements No. of Acceptable Risk of Incorrect Acceptance (assumes n=100) Over- statements1% 5% 10% 15% 20% 25% 30% 37% 50% 0 4.61 3.00 2.31 1.90 1.61 1.39 1.21 1.00 .70 1 6.64 4.75 3.89 3.38 3.00 2.70 2.44 2.14 1.68 2 8.41 6.30 5.33 4.72 4.28 3.93 3.62 3.25 2.68 3 10.05 7.76 6.69 6.02 5.52 5.11 4.77 4.34 3.68
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.

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L12 Notes_Part_18 - PPS Sampling problem PPS Sampling(20 points Boyd has decided to use probability-proportional-to-size(PPS sampling sometimes

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