A Critical Examination of Dollar Unit Sampling in the Audit of Accounts Receivable
Jenne, Stanley Earl
This item is only available for download by members of the University of Illinois community. Students, faculty, and staff at the U of I may log in with your NetID and password to view the item. If you are trying to access an Illinois-restricted dissertation or thesis, you can request a copy through your library's Inter-Library Loan office or purchase a copy directly from ProQuest.
Permalink
https://hdl.handle.net/2142/71366
Description
Title
A Critical Examination of Dollar Unit Sampling in the Audit of Accounts Receivable
Author(s)
Jenne, Stanley Earl
Issue Date
1982
Department of Study
Accountancy
Discipline
Accountancy
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Business Administration, Accounting
Abstract
This research examines three sample selection techniques used in conjunction with dollar unit sampling (DUS) and examines the behavior of five DUS bounds proposed in the accounting literature when applied to simulated accounts receivable populations. This research recognizes that large differences exist between the various populations which may be subjected to DUS and concentrates on accounts receivable populations. An analytical examination is made of the types of errors likely to occur in accounts receivable populations.
Prior published research regarding DUS has often employed the Poisson distribution to determine an upper limit on the number of errors in an auditing population. It has frequently been assumed that the use of the Poisson distribution was appropriate when random, systematic, or cell selection techniques have been employed. This research applies repeated sampling to four simulated accounts receivable populations and demonstrates that the achieved distributions of the number of errors discovered using systematic and cell selection are significantly different from a Poisson distribution under certain population assumptions.
Repeated sampling is employed to examine the behavior of five DUS bounds when applied to simulated accounts receivable populations. Test populations employed contain two different rates of error and five different distributions of relative error. Both the distribution of relative error and the population error rate are found to have an effect on the performance of each of the bounds examined. Two DUS bounds, introduced by Teitlebaum (1973) and McCray (1981), show consistently good performance in relation to the other bounds tested. A relatively small sample of size 50 is shown to produce upper bounds on monetary error which are extremely conservative. The magnitude of the effects of using a lower level of confidence is also illustrated.
Use this login method if you
don't
have an
@illinois.edu
email address.
(Oops, I do have one)
IDEALS migrated to a new platform on June 23, 2022. If you created
your account prior to this date, you will have to reset your password
using the forgot-password link below.
