Statistical Sampling Is Less Commonly Used for the Audit of Accounts

question 104

Multiple Choice

Statistical sampling is less commonly used for the audit of accounts payable than for accounts receivable because it is more difficult to:

• A) define the population.
• B) determine the tolerable exception rate.
• C) decide on attributes or variables sampling.
• D) mathematically calculate and interpret the results.

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Definitions:

Current Ratio

A liquidity ratio measuring a company’s ability to pay short-term obligations with its short-term assets.

Cash Dividends

Payments made by a corporation to its shareholders from its profits.

Short-term Investments

Financial assets expected to be converted into cash typically within a year, such as stocks or government bonds.

Inventory Turnover

A financial ratio that measures how many times a company's inventory is sold and replaced over a period.