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Definition/advantages/disadvantages of Monetary-Unit Sampling (MUS).

Definition/advantages/disadvantages of Monetary-Unit Sampling (MUS).

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Answer #1

Monetary unit sampling is statistical sampling developed specifically for use by auditors.

Advantages of Monetary Unit Sampling:

(1) Does not require the user to make assumptions about the distribution

(2) Results in a smaller sampling size than classical variable sampling - for a low error rate population

(3) Can be applied to a group of accounts because of automatic stratification

Disadvantages of Monetary Unit Sampling:

(1) Cannot evaluate unrecorded or zero balance items

(2) Inability to include negative balances

(3) Evaluates overstatement and understatement separately

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