What Is Sampling Risk

question 99

Multiple Choice

What is sampling risk?

• A)The risk that the auditor's conclusion based on a sample may be different from the conclusion if the entire population were subjected to the same audit procedure.
• B)The risk that the auditor expresses an opinion on the financial statements based on other audits.
• C)The risk that the auditor reaches an erroneous conclusion for any reason not related to sampling risk.
• D)The risk that the auditor concludes that a material misstatement exists when it does not.

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Definitions:

Issuing Bonds

The process by which corporations or governments raise capital by selling debt securities, promising to repay the principal amount with interest at a later date.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal, typically noted on an annual basis.

Futures Contracts

Agreements to buy or sell an asset at a predetermined future date and price.

Spot Price

The present market rate at which a specific asset like a commodity, currency, or security is available for purchase or sale with immediate delivery.