For a Given Audit Procedure, the Evidence Obtained from a Sample

question 17

Multiple Choice

For a given audit procedure, the evidence obtained from a sample of 200 would ordinarily be:

• A) more sufficient than from a sample of one hundred.
• B) less competent than from a sample of one hundred.
• C) more competent than from a sample of one hundred.
• D) less sufficient than from a sample of one hundred.

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Definitions:

Profitability Index

A financial tool used to measure the relative profitability of an investment, calculated by dividing the present value of future cash flows by the initial investment cost.

Internal Rate

Typically refers to the internal rate of return (IRR), which is a rate of return used in capital budgeting to measure and compare the profitability of investments.

Preference Decisions

Choices made between alternatives based on preferences for certain criteria or outcomes.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.