Match Five of the Terms (A- L) with the Definitions

question 9

Short Answer

Match five of the terms (a- l) with the definitions provided below (1- 5):
a. allowable risk of incorrect acceptance
b. allowable risk of incorrect rejection
c. difference estimation
d. misstatement bounds
e. monetary- unit sampling
f. mean- per- unit estimation
g. point estimate
h. probability- proportional- to- size sample selection
i. ratio estimation
j. statistical inferences
k. stratified sampling
l. variable sampling
1. A method of variables sampling in which the auditor estimates the population misstatement by multiplying the portion of sample dollars misstated by the total recorded population book value and also calculates sampling risk.
2. A method of projecting from the sample to the population to estimate the population misstatement, commonly by assuming that misstatements in the unaudited population are proportional to the misstatements found in the sample.
3. The risk that the auditor is willing to take of concluding a balance is materially misstated when it is, in fact, fairly stated.
4. A method of sampling in which all the elements in the total population are divided into two or more subpopulations that are independently tested and statistically measured.
5. A method of variables sampling in which the auditor estimates the population misstatement by multiplying the average misstatement in the sample by the total number of populations items and also calculates sampling risk.

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Definitions:

Substitute Input

An alternative resource or material that can be used in place of another in the production process to achieve the same outcome.

Labor Resource Market

A market where individuals offer their labor or services for wages to employers who are in need of those services.

Output Effect

The change in total revenue generated by selling an additional unit of a product or service.

Substitution Effect

The economic understanding that as prices rise or income decreases, consumers will replace more expensive items with cheaper alternatives.