Probability Proportionate to Size (PPS) Sampling Is _______

question 142

Multiple Choice

Probability Proportionate to Size (PPS) sampling is _______.

• A)an approach that uses attribute sampling theory to express a conclusion in dollar amounts
• B)an approach that uses non-statistical sampling theory to express a conclusion in dollar amounts
• C)rarely used in auditing, due to its prohibitive cost
• D)required to be used in the auditing of publicly traded companies

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Definitions:

Indirect Expenses

Costs that are not directly traceable to a specific cost object, such as the production of goods or services.

Decentralization

The distribution of decision-making power away from a central authority within an organization to lower levels or divisions.

Controllable Costs

Expenses that management can directly or indirectly control or influence in the short term, such as supplies and advertising.

Direct Expense

Costs that can be directly traced to a specific product, service, or department.