Auditing & Assurance Services 6th Edition by Timothy Louwers

Exercise 470

Sampling Risk. You and a friend are deciding whether to pack heavy clothing for a trip to the northeastern United States. You have decided that you would need heavy clothing only if the temperature is expected to fall below 50 degrees during your trip. You have studied the past 50 years' seasonal temperatures in the northeast. You are considering the use of sampling to calculate an expected average temperature; you will base your decision to pack heavy clothing on the results of your sample.
Required:
a. What is sampling risk? What two types of sampling risks are present in this context?
b. Describe the "costs" associated with the sampling risks in (a).
c. How would your sampling plan differ if you used statistical sampling versus nonstatistical sampling?
d. What are the advantages and disadvantages of using statistical sampling methods in an attempt to answer your question?