Problem:
Since an auditor is unable to examine every transaction, it is necessary to determine how many transactions to examine. After completing all the steps of the internal control audit process, the auditor determines a sample of transactions to audit.
The statistical use of PPS is one way to determine sample size for certain accounts. The other method is the classical variables approach, in which the sample size is determined by the professional judgment of the auditor.
How does an auditor use their professional judgment to set the sample size?
How reliable is that judgment?