Following is a set of situations that may or may not involve sampling.
| 1. |
An auditor is examining loan receivables at a local bank. The population of loans contains two strata. One stratum is composed of 25 loans that are each greater than $1 million. The second stratum contains 450 loans that are less than $1 million. The auditor has decided to test all loans greater than $1 million and 15 loans less than $1 million.
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| 2. |
Assume the same facts as number 1 except that the auditor decides to apply analytical procedures to the second stratum of loans.
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| 3. |
An auditor has haphazardly selected 30 sales invoices to be examined for proper pricing of the goods purchased by the customer.
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| 4. |
The prepaid insurance account is made up of four policies that total $45,000. The auditor has decided that this account is immaterial and decides that no policies will be examined
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| Required: |
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Indicate which situations involve audit sampling (statistical or nonstatistical) and why.
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