Which of the Following Observations About Discovery Sampling Is Accurate

question 34

Multiple Choice

Which of the following observations about discovery sampling is accurate?

• A) Discovery sampling is one of the more difficult statistical sampling variations to understand.
• B) After using discovery sampling, auditors can be certain that fraud does not exist in a population of checks.
• C) Discovery sampling allows an auditor to generalize and make inferences from the population to the sample.
• D) Auditors can quantify both the risk and samples until they have sufficient evidence that fraud does not likely exist.

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Definitions:

Par

The face value of a bond or other financial instrument, which is the amount to be paid to the holder at maturity.

HPR

Holding Period Return, a measure of the total return received from holding an asset or portfolio of assets over a specified period of time.

Dividend

A portion of a company's earnings distributed to its shareholders, typically in the form of cash payments or additional shares.

Dollar-Weighted Return

A method of calculating an investment's return that considers the timing and amount of each investment or withdrawal made.