[Anonymous]

In a probability-proportional-to-size sample with a sampling interval of $5,000, an auditor discovered that a selected account receivable with a recorded amount of $10,000 had an audit amount of $8,000. If this were the only error discovered by the auditor, the projected error of this sample would be:

A. $1,000.

B. $2,000

C. $4,000.

D. $5,000.

B. In probability-proportional-to-size sampling, the projected error is equal to the actual sample error when the book value of the item sampled is equal or greater than the sampling interval. In this instance, the book value is $10,000. The sampling interval is $5,000, so the actual error of $2,000 ($10,000 – $8,000) specifies that the projected error is also $2,000.

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While I understand how you get the answer, I am just wondering, what is the point of the sampling interval, or is this just there to throw you off?