Maximum Benefit from Independent Internal Verification Is Obtained When

question 136

Multiple Choice

Maximum benefit from independent internal verification is obtained when

• A) it is made on a pre-announced basis.
• B) it is done by the employee possessing custody of the asset.
• C) discrepancies are reported to management.
• D) it is done at the time of the audit.

---

Definitions:

Poisson Distribution

A probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space, assuming that these events occur with a known constant rate and independently of the time since the last event.

Hypergeometric Random Variable

A type of discrete random variable that describes the number of successes in a sequence of draws from a finite population without replacement.

With Replacement

A sampling method where each item is replaced back into the population before the next item is selected, allowing for repeated selection.

Defective Units

Items in a production batch that do not meet the required quality standards or specifications.