Optimum stratification for allocation proportional to strata totals for scrambled response

Mahajan, P. K.; Sharma, Prayas; Gupta, Rajesh Kumar

doi:10.3233/mas-2007-2203

Cited by 10 publications

(2 citation statements)

References 9 publications

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“…Given our focus on typical accounting and auditing applications involving large populations with low error rates, we assume that strata recorded value standard deviations are materially the same as unknown correct value standard deviations. 21 This is a common assumption made by other researchers, including Brito et al (2010), Dalenius and Hodges (1959), Ekman (1959), Gunning and Horgan (2004), Hedlin (2000), Lavallée and Hidiroglou (1988), McGrath (2003), and Mehta et al (1996).…”

Section: Methodsmentioning

confidence: 85%

Designing Efficient Stratified Mean-Per-Unit Sampling Applications in Accounting and Auditing

Hall

Hoogduin²,

Pierce

et al. 2021

Journal of Accounting, Auditing & Finance

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Despite technological advances in accounting systems and audit techniques, sampling remains a commonly used audit tool. For critical estimation applications involving low error rate populations, stratified mean-per-unit sampling (SMPU) has the unique advantage of producing trustworthy confidence intervals. However, SMPU is less efficient than other classical sampling techniques because it requires a larger sample size to achieve comparable precision. To address this weakness, we investigated how SMPU efficiency can be improved via three key design choices: (a) stratum boundary selection method, (b) number of sampling strata, and (c) minimum stratum sample size. Our tests disclosed that SMPU efficiency varies significantly with stratum boundary selection method. An iterative search-based method yielded the best efficiency, followed by the Dalenius–Hodges and Equal-Value-Per-Stratum methods. We also found that variations in Dalenius–Hodges implementation procedures yielded meaningful differences in efficiency. Regardless of boundary selection method, increasing the number of sampling strata beyond levels recommended in the professional literature yielded significant improvements in SMPU efficiency. Although a minor factor, smaller values of minimum stratum sample size were found to yield better SMPU efficiency. Based on these findings, suggestions for improving SMPU efficiency are provided. We also present the first known equations for planning the number of sampling strata given various application-specific parameters.

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Section: Methodsmentioning

confidence: 85%

Designing Efficient Stratified Mean-Per-Unit Sampling Applications in Accounting and Auditing

Hall

Hoogduin²,

Pierce

et al. 2021

Journal of Accounting, Auditing & Finance

View full text Add to dashboard Cite

show abstract

“…A large number of rectifications on Warner's (1965) pioneering technique have been cited in the literature, for instance, see Fox and Tracy (1986), Mukherjee (1987, 1988), Hedayat and Singh (1991), Ryu, Hong, and Lee (1993), Tracy and Mangat (1996), and Singh (2003), for the reviews. Some other developments on randomized response (RR) sampling in recent years include Mahmood, Singh, and Horn (1998), Ryu et al (2005Ryu et al ( -2006, Hong (2005Hong ( -2006, Grewal, Bansal, andSidhu (2005-2006), Perri (2008), Mahajan, Sharma, and Gupta (2007), Chua and Tsui (2000), Singh, Singh, and Mangat (2000), Chang and Huang (2001), Chang, Wang, and Huang (2004), Huang (2004), Land, Singh, and Sedory (2011), Kim and Warde (2004), Kim and Elam (2005), and so on.…”

Section: Introductionmentioning

confidence: 99%