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:

Borrower Characteristics

Characteristics that describe individuals or entities seeking loans, including their credit history, income level, and financial stability.

Taxability

The condition of being subject to taxation by governmental authorities.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.

Productive Economic Resource

Assets or inputs used in the production of goods and services, including land, labor, capital, and entrepreneurship.