Student Forums CIA Part 2: Practice of Internal Auditing Section III: Performing the Engagement Question ID: CIA 595 II.45 (Topic: 1C. Apply Sampling and Statistical Analysis T

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  • #231911
    Denny Benjamin
    Participant

    The question is what factor most likely precludes the auditor from using the PPS sampling.  The answer shown as correct is “PPS sampling is not as effective in calculating the upper error estimate when a large number of errors are expected.”

    What do you mean by “upper error estimate”?  And why is PPS sampling not effective in calculating it? 

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  • #231922
    Brian Hock
    HOCK international

    Denny,

    The upper error estimate is the highest estimated error. There is a range of what the error is, and this is the higher end of that range.

    The take away from this question is that we should not use PPS when we expect that there are a lot of errors in the population.

    Brian

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