An Accounts Receivable Account Balance Is $500,000 and the Auditor

Multiple Choice

An accounts receivable account balance is $500,000 and the auditor determines a sample size of 30 would provide adequate assurance.The auditor plans to use a monetary-unit sampling plan with systematic sample selection.The auditor notices that there are six customer accounts of at least $15,000 and would like the systematic selection technique to select all items that are at least $15,000,even if that means the sample size is slightly larger than 30.To achieve the auditor's objectives,the sampling interval should be

A) 6.
B) 20.
C) 16,666.
D) 15,000.
Typically the threshold would be $16,666 ($500,000/30) , but in order to guarantee the selection of all items greater than $15,000, the sampling interval needs to be no greater than $15,000. While a sampling interval of $6 or $20 would also guarantee that all items greater than $15,000 are selected, such small intervals would be inefficient and result in a sample size much greater than 30.