The following are some of situations in which using either monetary unit sampling (MUS) or classical variables sampling would be preferable. Using the letters M (for monetary unit sampling—MUS) or C (for classical variables sampling).
____ 1. Several sampling units in the population have a zero or negative balance.
____ 2. The auditor would like to examine a smaller number of items.
____ 3. The account balance is susceptible to understatement error.
____ 4. The account balance includes a few logical units with very large dollar balances.
____ 5. The auditor is able to form a reasonable estimate of the variability of the population.
____ 6. The auditor would like to ensure that the sampling method provides a conservative (higher) estimate of misstatement in the account balance.
____ 7. The account balance is susceptible to overstatement error.
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