The Efficiency Gained from Stratification of a Population Is Based

question 68

Multiple Choice

The efficiency gained from stratification of a population is based on the fact that:

• A) the subpopulations can be examined by different audit personnel.
• B) it is inherently easier to test several sets of fewer items.
• C) the groupings are more homogeneous.
• D) more errors are normally found in the largest and the smallest items of a population.
• E) a change in the variability of a population affects sample size by the square root of the relative change.

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Definitions:

Calendar Year

A one-year period that begins on January 1 and ends on December 31, used for most financial and tax reporting purposes.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including a balance sheet, income statement, and cash flow statement.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts.

General Ledger

A complete record of all financial activities conducted by a company throughout its existence.