Final answer:
Classical variables sampling does not require an estimate of the population's standard deviation, making it advantageous over monetary-unit sampling. This method also handles zero and negative balances with ease but does not automatically identify significant individual amounts. Option a is correct..
Step-by-step explanation:
When deciding between classical variables sampling and monetary-unit sampling during an audit, understanding the differences and potential advantages of each method is crucial. An advantage of using classical variables sampling is that an estimate of the standard deviation of the population's recorded amounts is not required. This is in contrast to monetary-unit sampling, where such an estimate is often necessary to determine the sample size and evaluate the results. Since classical variables sampling focuses on the actual values of items within a population, it can better accommodate items with zero or negative balances without special design considerations. However, it may not automatically identify and select any amounts that are individually significant, as monetary-unit sampling typically would.
Sampling variability is a concept to remember when using any sampling method. It refers to the variation in statistics (like the mean) from one sample to another within the same population. A larger sample size tends to reduce this variability, rendering the sample more representative of the population.