What is the key advantage and disadvantage associated with systematic sample selection? How must auditors address this disadvantage?
What will be an ideal response?
The key advantage is its ease of use. In most populations, a systematic sample can be drawn quickly and the approach automatically puts the numbers in sequence, making it easy to develop the appropriate documentation.
The key disadvantage is the possibility for bias. Because of the way systematic selection is done, once the first item in the sample is selected, all other items are chosen automatically. This causes no problem if the characteristic of interest is distributed randomly throughout the population, but this may not always be the case. Therefore, when auditors use systematic selection, they must consider possible patterns in the population data that can cause sample bias.
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What will be an ideal response?
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Indicate whether the statement is true or false