Problem

Nonstatistical Attributes Sampling. Monroe Curtis is auditing the revenue cycle of Kentuck...

Nonstatistical Attributes Sampling. Monroe Curtis is auditing the revenue cycle of Kentucky Distilleries and has elected to perform a nonstatistical test of controls. Kentucky Distilleries sells Old Horse Bourbon to wholesale distributors around the country. Because the sale of bourbon is strictly controlled, Curtis does not expect deviations to be present in the system and has assessed control risk as low and selected a sample size of 50 sales. Curtis has defined a deviation as a recorded sale not being supported by a shipping document with a federal tax stamp.

Required:

a. How does nonstatistical sampling differ from statistical sampling?


b. Why would Curtis choose to perform nonstatistical sampling instead of statistical sampling?


c. How should Curtis select the sample?


d. What conclusion should Curtis make if one deviation is found?

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