If the Risk of Material Misstatement Is Low and Detection

question 39

Multiple Choice

If the risk of material misstatement is low and detection risk is high _______.

• A)then a smaller sample size should be selected
• B)then a larger sample size should be selected
• C)then control risk should be assessed as high
• D)the auditor should consider outsourcing the audit work to the internal audit function

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Definitions:

Marketing Segmentation

The process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers based on some type of shared characteristics.

Demographics

Statistical data relating to the population and particular groups within it, often used in marketing to segment markets by age, gender, income level, and other attributes.

Consumer Behaviour

The study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences.

Demographics

Statistical data related to the characteristics of a population, such as age, gender, income, and education.