When an Audit Procedure Is Tested on an Entire Group

question 27

Multiple Choice

When an audit procedure is tested on an entire group of transactions, _______.

• A)sampling is not required
• B)non-statistical sampling is required
• C)statistical sampling is required
• D)the sample should be discarded, and a new random sample drawn

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Definitions:

Index Fund

A type of mutual fund or exchange-traded fund designed to replicate the performance of a specific market index by holding the same investments as the index.

Market Risk Premium

The extra yield an investor anticipates by keeping a risky market portfolio over risk-free securities.

Beta

An indicator of how much the risk or instability of a security or portfolio deviates from the broader market.

Standard Deviation

A statistical measure of the dispersion of a set of data points from their mean, widely used in finance to quantify the variability of returns.