Question

Explain the major difference between traditional sampling and dollar unit sampling.

Answer 1

Monetary-unit sampling (MUS) is a method of statistical sampling used to assess the amount of monetary misstatement that may exist in an account balance. The method, also known as dollar-unit sampling or probability-proportional-to-size sampling, has been used for many years and is widely accepted among auditors.

Many auditors apply MUS using essentially the same methods that were used before the invention of personal computers and spreadsheet software. This approach relies on printed tables that offer limited options. Furthermore, MUS requires calculations that introduce the possibility of error if made manually.

• It is easier to apply than classical variables sampling.

• There is no need to consider the characteristics of the population when determining sample sizes, such as the standard deviation of dollar amounts within the population.

• The stratification of a population is not needed, since samples are automatically selected in proportion to their dollar amounts.

• If no misstatement is expected, the sample size is quite efficient.