When Sampling, the Risk Always Exists _______

question 30

Multiple Choice

When sampling, the risk always exists _______.

• A)that the auditor's conclusion based on the sample may be different than the conclusion drawn if the auditor had audited the entire population.
• B)that the auditor's conclusion based on the sample may be the same as the conclusion drawn if the auditor had audited the entire population.
• C)that audit fees may be lowered as a result of auditing a sample
• D)that management may request a new sample

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Definitions:

Confirmatory

Pertaining to tests or analyses conducted to confirm a prior hypothesis or finding.

Exploratory

Related to the initial investigation of phenomena, often without specific expectations or hypotheses, used to identify patterns, relationships, or insights.

SEM

SEM, or Standard Error of the Mean, quantifies the amount of variability in the mean of a sample distribution compared to the true population mean.

Factor Analysis

A statistical method used to describe variability among observed, correlated variables in terms of potentially lower number of unobserved variables, called factors.