Final answer:
Monetary-unit sampling (MUS) is likely more advantageous over classical difference estimation for a smaller sample size when few errors are expected. To reduce sampling error, increasing the sample size is effective. A ±3 percent sampling error means the true population value likely falls within 3 percent above or below the observed sample statistic.
Step-by-step explanation:
The question asked pertains to the advantage of using monetary-unit sampling (MUS) over classical difference estimation when it comes to sampling for errors in audits.
Monetary-unit sampling is beneficial particularly when the auditor expects few errors. This approach often leads to a smaller sample size and thus can be more efficient compared to classical sampling methods. If few errors are expected, then theoretically each unit of currency has a low probability of containing an error, which allows for a smaller, but still effective, sample size.
To address part d, one way to lower the sampling error is by increasing the sample size. Since the sampling error is inversely proportional to the sample size, a larger sample size reduces the variability that can occur purely by chance and thereby enhances the representativeness of the sample with respect to the entire population.
Part e refers to a sampling error indicated by a ±3 percent range. This range represents the margin by which the true value in the population might differ from the observed sample value. If a poll result is 60 percent with a ±3 percent sampling error, the true population value is likely between 57 percent and 63 percent.