Sample Selection: Monetary Unit Sampling. Emerson Washburn is examining theaccounts receivable of Anaheim Company and has decided to use MUS to select a sample ofcustomer accounts for confirmation. Anaheim’s accounts receivable totaled $3,500,000 andcomprised 3,000 different customer accounts ranging in amount from $200 to $125,000.Based on the characteristics of the population and acceptable risk of incorrect acceptance,tolerable misstatement, and expected misstatement, Washburn determined a sample size of20 accounts.Required:a. Without making any calculations, briefly describe how Washburn would select a sampleof customer accounts from the population of accounts receivable.b. If Washburn selected a random starting point of 172,600, what are the first four dollarsthat would be selected? How would Washburn proceed to evaluate these items?c. What would Washburn do if two of the dollars selected are contained within the samecustomer account?d. Anaheim maintains its accounts receivable balances in a computerized file that has thefollowing information: (1) customer number, (2) customer name, (3) total account balance, and (4) account status (current versus past due). For each of these elements, comment on any procedures that Washburn should perform before selecting the sample if thepopulation were arranged based on these elements (for example, arranged numerically bycustomer number, alphabetically by customer name).
Sample Selection: Monetary Unit Sampling. Emerson Washburn is examining the
accounts receivable of Anaheim Company and has decided to use MUS to select a sample of
customer accounts for confirmation. Anaheim’s accounts receivable totaled $3,500,000 and
comprised 3,000 different customer accounts ranging in amount from $200 to $125,000.
Based on the characteristics of the population and acceptable risk of incorrect acceptance,
tolerable misstatement, and expected misstatement, Washburn determined a sample size of
20 accounts.
Required:
a. Without making any calculations, briefly describe how Washburn would select a sample
of customer accounts from the population of accounts receivable.
b. If Washburn selected a random starting point of 172,600, what are the first four dollars
that would be selected? How would Washburn proceed to evaluate these items?
c. What would Washburn do if two of the dollars selected are contained within the same
customer account?
d. Anaheim maintains its accounts receivable balances in a computerized file that has the
following information: (1) customer number, (2) customer name, (3) total account balance, and (4) account status (current versus past due). For each of these elements, comment on any procedures that Washburn should perform before selecting the sample if the
population were arranged based on these elements (for example, arranged numerically by
customer number, alphabetically by customer name).
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 6 images
