Exam CISA topic 1 question 1062 discussion

C. It increases the likelihood of selecting material items from the population. Monetary unit sampling is a statistical sampling method used in auditing. This method involves treating each dollar (or other monetary unit) in a population of transactions as a separate sampling unit. The key advantage of this approach is that it inherently increases the likelihood of selecting higher-value items (which are often the most material) for testing. This is because larger transactions comprise more monetary units and thus have a higher probability of being selected in the sample. Here's why the other options are less accurate:

C. it increases the likelihood of selecting material items from the population.

One advantage of monetary unit sampling is that it can easily be applied manually when computer resources are not available. Monetary unit sampling is a statistical sampling method commonly used in auditing to select samples from a population of monetary items. It allows auditors to project the results of their sample to the entire population based on monetary amounts.

A. large-value population items are segregated and audited separately. Monetary unit sampling is a statistical sampling technique used in auditing to select and test items from a population. One of its advantages is that it allows for the segregation and separate auditing of large-value items. This can be beneficial because large-value items may have a significant impact on financial statements and financial statements' overall accuracy and reliability. By segregating and auditing these large-value items separately, auditors can give special attention to high-risk areas and ensure they are accurately represented in the financial statements.