Combined monetary unit sampling from several independent populations: Sample size planning and sample evaluation with the moment method*

Abstract

Abstract, Although auditors often determine an upper bound on the amount of error in individual accounts, their primary concem is with the overall amount of error over several accounts. This paper presents a combined bound procedure for determining such an overall upper bound when using the moment method of monetary unit sampling (MUS). A procedure is also presented for determining optimal sample sizes over several independent accounts. The new combined bound procedure provides the moment method of MUS with the same type of flexibility that is currently available for the Stringer method of MUS. In addition, the new sample size planning procedure provides the combined moment bound with added flexibility and options that are not available when using a combined Stringer bound approach. The effectiveness and efficiency of both procedures has been investigated using 4324 separate simulation studies. The results indicate that the combined upper confidence bounds of the moment method are significantly smaller than those provided by the most attractive Stringer-based combined bound method. Further, the sample size planning procedure can be an effective audit tool.Resume. Bien que les verificateurs fixent souvent la limite superieure du taux d'erreur acceptable pour des comptes particuliers, leur preoccupation premiere touche le taux global d'erreur pour un ensemble de comptes. L'auteur propose un procede permettant d'etablir une limite combinee visant la determination de cette forme de limite superieure globale grace a l'utilisation de la methode des moments appliquee a l'echantillonnage en unites monetaires. II propose egalement un procede visant la determination d'echantillons de taille optimale pour un ensemble de comptes independants. Le nouveau procede de limite combinee fait appel a la methode des moments d'echantillonnage en unites monetaires avec le meme type de souplesse que Ton peut actuellement obtenir en utili sant la methode de Stringer. De plus, le nouveau procede de planification de la taille de l'echantillon livre une limite combinee resultant de l'application de la methode des moments en meme temps qu'il offre une souplesse plus grande et des possibilites que n'offre pas la methode de Stringer. L'efficacite et l'efficience des deux procedes sont analysees a l'aide de 4324 etudes de simulation distinctes. Les resultats indiquent que les limites de confiance superieures combinees obtenues par la methode des moments sont

Limitations and Application Possibilities of the Monetory Unit Audit Sampling Method: Theoretical Aspects

“…It can be applied in auditing different accounts of financial statements, e.g., accounts receivable, inventories etc. (Grimlund, 1990;Johnson and Mohsen, 2013). By applying the method of monetary unit sampling, sample size can be calculated according with the formula presented below:…”