A team of internal auditors is assigned to audit the employee relations process in an organization, which includes employee conduct and disciplinary hearings. Which of the following audit approaches would provide the auditors with the best evidence to determine the degree to which disciplinary decisions are complying with documented policy?

1. Review a sample of concluded disciplinary reports to assess how the policy was applied in each case
2. Interview a sample of impacted employees for their opinions on the clarity and fairness of the policy
3. Observe several disciplinary hearings to determine whether they are in compliance with the policy
4. Conduct an interview to assess the disciplinary hearing chairmans understanding of the policy and its appropriate use

During an internal audit engagement, which of the following is true regarding the decision to use statistical sampling over nonstatistical sampling?

1. The decision affects the test procedures performed
2. The auditors response to errors detected will be influenced
3. The competence of the evidence obtained is greater with statistical sampling
4. Nonstatistical sampling may be more cost effective