Whenever Sampling Is Used in an Audit Procedure, Uncertainty Will

question 22

Multiple Choice

Whenever sampling is used in an audit procedure, uncertainty will be present. The two sources of this uncertainty are:

• A) sampling risk and nonsampling risk.
• B) compliance risk and substantive risk.
• C) inherent risk and control risk.
• D) detection risk and occurrence risk.
• E) detection risk and inherent risk.

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Definitions:

Correlation Problem

Issues arising from attempts to interpret or infer causality from purely correlational data without establishing a clear causal relationship.

Causation

The relationship between cause and effect, where one event (the cause) directly results in another event (the effect).

Economic Activity

Any action that involves the production, distribution, and consumption of goods and services within an economy.

Fallacy of Composition

The erroneous belief or argument that what is true for a part is necessarily true for the whole, or that what holds for individual members of a group must necessarily hold for the group as a whole.