Virtually all calculations to date dealing with radiance calculations in an atmosphere-ocean system have been performed using a scalar theory approach where polarization effects have been neglected. This approach is always in error; however, neither the nature nor the magnitude of the errors induced has been studied. We have written a large scale Monte Carlo program to calculate the complete four component Stokes vector at any region in a fully inhomogenous atmosphere-ocean system with inclusion of a wind ruffled stochastic interface. The program uses as input the Mueller matrices for both the aerosols in the atmosphere as well as the hydrosols in the ocean. The Mueller matrix for the stochastic interface is also accurately accounted for. The correlated sampling technique is used to compute radiance distributions for both the scalar and the Stokes vector formulations in a single computer run, thus allowing a direct comparison of the errors induced. Results are presented for a realistic atmosphere-ocean system to show the effects of the volume scattering function, the dielectric interface, and waves on the induced errors.© (1992) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.