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Monetary Unit Sampling (MUS)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Monetary Unit Sampling (MUS)

  • This topic has 3 replies, 2 voices, and was last updated 11 months ago by Kim Smith.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • February 27, 2022 at 2:15 pm #649452
    justalittlelost
    Participant
    • Topics: 18
    • Replies: 29
    • ☆

    Hey Kim,

    This is an excerpt from the technical article on sampling, ” Monetary balances can also be subject to varying degrees of exception – for example, a payables balance of $7,000 can be understated by $7, $70, $700 or $7,000 and the auditor will clearly be interested in the larger misstatement.”
    I just wanted to confirm if all they’re trying to say is that mus focusses on the larger amounts and thus detect misstatements that may exist in the higher weighted units or is there more to it ?

    Thank you.

    February 27, 2022 at 4:00 pm #649460
    Kim Smith
    Keymaster
    • Topics: 100
    • Replies: 6797
    • ☆☆☆☆☆

    Not sure which technical article you are referring to but as illustrated on page 67 of our notes MUS is a ” value-weighted” selection method – which guarantees selection of all items in a population that are greater than the sampling interval. As our illustration shows “This will direct testing to where there is the greatest potential for misstatement.”

    BUT if you were testing payables rather than receivables – you would be more concerned with the completeness assertion (i.e. understatement) – you would be more concerned that a balances is too small – rather than too large. In this case, rather than base a sample on what IS recorded in payables, you would (for example) select the major suppliers (as identified by purchases during the year) for substantive testing of supplier’s statement reconciliations.

    February 28, 2022 at 4:12 am #649487
    justalittlelost
    Participant
    • Topics: 18
    • Replies: 29
    • ☆

    The AA technical article I was referring to is the ” Audit Sampling” article on the acca website. But yes, your explanation is exactly what I was looking for to obtain a clearer understanding of mus.
    Thank you so much !!

    February 28, 2022 at 7:08 am #649491
    Kim Smith
    Keymaster
    • Topics: 100
    • Replies: 6797
    • ☆☆☆☆☆

    You’re welcome!

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