Question 1: Ratio estimation and difference estimation are two widely used variables sampling plans. Required: a. Under what conditions are ratio estimation or difference estimation appropriate sampling plans for estimating the total dollar value of a population? b. What relationship determines which of these two plans will be most efficient in a particular situation?

Question 2: Bill Jones wishes to use nonstatistical sampling to select a sample of his client's 3,000 accounts receivable, which total $330,000. He believes that $30,000 represents a reasonable tolerable misstatement. He also has assessed both the combination of inherent and control risk at the maximum level and the risk that other substantive procedures will fail to detect a material misstatement at the maximum. He wishes to use a structured approach. Use the formula presented in the text to calculate the required sample size.

Question 3: 1. Scott Duffney, CPA, has randomly selected and audited a sample of 100 of Will-Mart's accounts receivable. Will-Mart has 3,000 accounts receivable accounts with a total book value of $3,000,000. Duffney has determined that the account's tolerable misstatement is $250,000. His sample results are as follows: Average audited value $990 Average book value 998 Required: Calculate the accounts receivable estimated audited value and projected misstatement using the:

a. Mean-per-unit method. b. Ratio method. c. Difference method.