Define monetary unit sampling and explain its importance in auditing. How does it combine the features of attributes and variables sampling?

Begin by defining monetary unit sampling and its importance in auditing.

A.

Monetary unit sampling is a method whereby the population is defined as the individual dollars (or other currency) making up the account balance. Monetary unit sampling is the most commonly used method of statistical sampling for tests of details of balances. This is because it uses the simplicity of attributes sampling yet still provides a statistical result expressed in dollars.

B.

Monetary unit sampling is a method whereby the population is defined as the individual dollars (or other currency) making up the account balance. Monetary unit sampling is the most commonly used method of statistical sampling for tests of controls and substantive tests of transactions. This is because it uses the simplicity of attributes sampling yet still provides a statistical result expressed in dollars.

C.

Monetary unit sampling is a method whereby the population is defined as the physical units making up the account balance. Monetary unit sampling is the most commonly used method of statistical sampling for tests of details of balances. This is because it uses the simplicity of attributes sampling yet still provides a statistical result expressed in units.

D.Monetary unit sampling is a method whereby the population is defined as the physical units making up the account balance. Monetary unit sampling is the most commonly used method of statistical sampling for tests of controls and substantive tests of

transactions.

This is because it uses the simplicity of attributes sampling yet still provides a statistical result expressed in units.

E.

None of the above.

How does monetary unit sampling combine the features of attributes and variables sampling?

A.

Monetary unit sampling combines the features of attributes and variables sampling by using attribute tables to estimate the total proportion of population dollars misstated, based on the number of sample dollars misstated, and then modifies this amount by the amounts of misstatements found. The features of variables sampling is incorporated into the process since sampling with probability proportional to size is included in the process.

B.

Monetary unit sampling combines the features of attributes and variables sampling by using attribute tables to estimate the total proportion of population units misstated, based on the number of physical units misstated, and then modifies this amount by the amounts of misstatements found. Variables sampling is incorporated into the process since normal distribution theory is used.

C.

Monetary unit sampling combines the features of attributes and variables sampling by using attribute tables to estimate the total proportion of population dollars misstated, based on the number of sample dollars misstated.

D.

Monetary unit sampling combines the features of attributes and variables sampling by using attribute tables to estimate the total proportion of population units misstated, based on the number of physical units misstated, and then modifies this amount by the amounts of misstatements found. The features of variables sampling is incorporated into the process since dollar unit sampling is included in the process.

E.

None of the above.