You are an audit manager employed by the accounting firm of Misconceive and Bluff. You are discussing statistical sampling with the senior partner of the firm. He makes the following comments:

(a) ‘Look at this conclusion on-the audit of purchases. “I am 95 per cent certain that the purchases figure has not been overstated by more than £50,000.” That was written by one of our most junior assistants. It proves that our audit approach is objective.’

(b) ‘The tolerable error which you have suggested for the audit of XY Ltd is far too low.

The time taken to select and test all those sample items would cost more than the client is prepared to pay. Rearrange the figures so that the sample size is brought down to a more sensible level.’

(c) ‘What is all this nonsense about the “qualitative” nature of errors? Our approach is scientific, just look at those statistical tables! There is no need to worry about all of this subjective evaluation.’

You are required to respond to the partner’s comments.