Which of the following statements is correct concerning probability-proportional-to-size sampling?
A)The sampling distribution should approximate the normal distribution.
B)The auditors control the risk of incorrect rejection by specifying that risk level for the sampling plan.
C)The sampling interval is calculated by dividing the population book value by the sample size.
D)The auditors control the risk of incorrect acceptance by incorporating an expected misstatement into the sample size formula.

Question

Quizplus · Accepted Answer

In probability-proportional-to-size sampling, the sampling interval is calculated by dividing the population book value by the sample size. This ensures that each item in the population has an equal chance of being selected, as the larger the item's value, the higher the probability of its selection. The other options are incorrect because: 
A) The shape of the sampling distribution depends on the type of data being analyzed and the sample size, and may not necessarily approximate a normal distribution. 
B) The auditors control the risk of incorrect acceptance or rejection by specifying the acceptable level of risk, but not by controlling it through the sampling plan. 
D) The expected misstatement is used to calculate the sample size but not to control the risk of incorrect acceptance.

Which of the Following Statements Is Correct Concerning Probability-Proportional-To-Size Sampling