The use of statistical sampling techniques in an examination of financial statements does not eliminate judgmental decisions.

Required:

a. Identify and explain four areas where judgment may be exercised by a CPA in planning a statistical sampling test.

b. Assume that a CPA's sample shows an unacceptable occurrence rate. Describe the various actions that he may take based upon this finding.

c. A nonstratified sample of 80 accounts payable vouchers is to be selected from a population of 3,200 . The vouchers are numbered consecutively from 1 to 3,200 and are listed, 40 to a page, in the voucher register. Describe four different techniques for selecting a random sample of vouchers for review.