Stratified sampling is used when the population can be divided into distinct subgroups (strata) that differ significantly from each other but are internally homogeneous. In the context of auditing, revenue earned through cash receipts or as receivables would have different characteristics and risk profiles. Stratifying the population allows the auditor to ensure that each subgroup is adequately represented in the sample, leading to more reliable and accurate audit conclusions.
References:
The Institute of Internal Auditors (IIA) Practice Guide: Audit Sampling
IIA Standard 2320 - Analysis and Evaluation
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