Chapter 9A, Problem 1RQ

To determine

Explain the factors affecting sample size in a monetary unit sampling (MUS).

Explanation of Solution

Monetary unit sampling (MUS):

Monetary unit sampling is a technique of calculation the misstatement in the population. It uses the attributes sampling theory for the calculation of the misstated value in the defined population. MUS consider the population size as a single dollar value item. It is is the total dollar value of the population.

$\text{Sample size = }\frac{\text{Population book value }\times \text{ Reliability factor}}{\text{Tolerable misstatement - (Expected misstatement }\times \text{ Expansion factor)}}$

Explain the factors affecting sample size in a monetary unit sampling (MUS):

Following are the factors affecting sample size in a monetary unit sampling (MUS):

• Book value of the population.
• Reliability factor.
• Expected misstatement.
• Tolerable misstatement.
• Expansion factor. 

Thus, the above defined factors are used in the calculation of the sample size.