The population consists of many individual items for which a book value is known for each. Very few differences between this recorded value and the audited value are expected, but any difference is most likely to be an overstatement. Which of the following statistical sampling techniques would be most appropriate under these conditions?
A) MPU estimation
B) ratio estimation
C) PPS sampling
D) difference estimation
E) discovery sampling

Question

Quizplus · Accepted Answer

PPS (Probability Proportional to Size) sampling is most appropriate when the population consists of items with known values and differences between recorded and audited values are expected to be minimal but primarily in the form of overstatements. This method gives higher selection probability to items with higher values, which is suitable for detecting overstatements in financial audits.

The Population Consists of Many Individual Items for Which a Book