If the Association of Population Items with Random Numbers Is

question 17

Multiple Choice

If the association of population items with random numbers is difficult and expensive, but the auditor does not have sufficient knowledge about the population the auditor should:

• A)Use non statistical sampling.
• B)Use statistical sampling.
• C)Use a computer to analyze and the population and then decide which method to use.
• D)First determine the possible impacts of an error in the population on the financial statements to decide if sampling is reasonable.

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Definitions:

Overhead Cost

General expenses related to the operation of a business that cannot be directly attributed to a specific product or service.

Product S1

A specific item or version of a product, likely distinguished by unique features or specifications.

Product Margin

The profit generated by selling a product, calculated by subtracting the cost of goods sold from the sales revenue of that product.

Overhead Cost

Expenses not directly tied to production activities, such as rent, utilities, and administrative costs.