Hill has decided to use probability-proportional-to-size (PPS) sampling, sometimes called dollar-unit sampling, in the audit of a client’s accounts receivable balances. Hill plans to use the following PPS sampling table:
TABLE
Reliability Factors for Overstatements
Additional information
|
Tolerable misstatements |
|
|
(net of effect of expected misstatements) |
$ 24,000 |
|
Risk of incorrect acceptance |
20% |
|
Number of misstatements |
1 |
|
Recorded amount of accounts receivable |
$240,000 |
|
Number of accounts |
360 |
What sample size should Hill use?
a. 120
b. 108
c. 60
d. 30