Identify the advantages and disadvantages of monetary-unit sampling

The sampling technique used to determine the fairness of financial account balances is termed MUS. All the monetary unit items like account receivables, loans receivables, and inventory are tested in the procedure. This technique is also called Dollar Unit Sampling, and Proportional to Size.

Advantages

• MUS select all the dollar value items which are larger in value. Since all the larger value units are selected based on the interval sample, there is no chance that a large-dollar value item is missed. Therefore, there is a less risk of failure of error detection
• An auditor can establish a low expected error rate, if little to no errors is to be expected. Relatively, a small sample size used
•  MUS do not require any major calculations like standard deviation to determine the sample. An auditor finds this technique to be easier to test the monetary unit samples
•  The random selection of sample is not the basis for selecting the sample in MUS. The auditor has the advantage of unlimited stratification by using MUS
  
  Disadvantage
•  MUS procedures will not detect the missing documents or transactions. Due to this, the missed transactions cannot be sampled
•  The zero or negative values cannot be selected because there is no chance for such samples in MUS
•  As this method cannot provide sufficient information regarding the estimates of unknown population values, the interval calculations cannot be done accurately
•  MUS method are conservative. Therefore, the auditors assumption for allowance of sampling risk will be low as compared to the sample result calculations. This may lead to overstatement of financial statements.
•  Of the three sampling techniques (attribute sampling, classical variable sampling, and MUS) MUS is a relatively, new concept for the auditors. Also, the availability of training materials is comparatively very less