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In the past, the auditors have found that the book value of a receivable account has been related to the amount the account is misstated (i.e., large accounts have large misstatements and small accounts have small misstatements). Which of the following techniques is most likely to be efficient? A. Mean-per-unit estimation.B. Ratio estimation.C. Difference estimation.D. Sequential sampling estimation.

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sandlee09

Answer:

B. Ratio estimation

Explanation:

According to the information given in the question the best technique for this situation would be B. Ratio estimation. This is because it is defined defined to be the ratio of means of two random variables. "Ratio estimates are biased and corrections must be made when they are used in experimental or survey work" .... Therefore this is the best technique for large accounts like the one in question.

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