Based on the same background information as was used for question 1, but assuming that in selecting which customer balances to detail test you want to expand directed testing by selecting additional items based on risk and size, reevaluate the mix of directed testing and audit sampling. If you believe it would be efficient and effective to increase your directed testing, prepare a schedule that includes the following:
(a) Identify what characteristic can be used to select riskier items.
(b) List the customer numbers and related balances you would select for directed testing based on risk and provide the characteristics you used.
(c) List the additional customer accounts you would select for directed testing based on size and "coverage."
(d) Determine whether it would be necessary to test the remaining population using audit sampling; if so, compute your sample size for testing the remaining population through audit sampling and justify the inputs you used in the sample size formula.