Question

An auditor is designing a sampling plan to test the accuracy of daily production reports over the past 3 years. All of the reports contain the same information except that Friday reports also contain weekly totals and are prepared by managers rather than by supervisors. Production normally peaks near the end of a month. If the auditor wants to select two reports per month using an interval sampling plan, which of the following techniques reduces the likelihood of bias in the sample?

A. Using multiple random starts.
B. Increasing the precision.
C. Increasing the confidence level.
D. Estimating the error rate in the population.

Answer 1

The best method to reduce the likelihood of bias in the auditor's sampling plan is by using multiple random starts. This technique ensures randomization and diminishes systematic bias which could affect the sample's representativeness.

Step-by-step explanation:

To minimize bias in a sampling plan where the auditor selects two reports per month using an interval sampling technique, the best method would be A. Using multiple random starts. This approach helps to ensure that the sample is randomized and reduces the risk of systematic bias that could occur if reports happen to follow a pattern coinciding with the sampling interval.

For instance, if production peaks at the end of each month and the interval sampling coincides with those peaks, the sample may not be representative. Multiple random starts mean that the first item is chosen randomly, and then every nth item after that is selected, with 'n' being determined by the desired sample size. This technique also helps in reducing the potential bias due to the difference in report preparation on Fridays and other weekdays.