The Initial Sample Size Is So-Called Because

question 82

Multiple Choice

The initial sample size is so-called because:

• A) the auditor must take several samples to ensure randomness.
• B) there is always another sample to be done.
• C) the deviations must be evaluated before deciding whether the sample is sufficiently large to achieve the objectives.
• D) the auditor must take several samples to ensure that the final sample is representative of the population.

---

Definitions:

Total Unsecured Liabilities

Liabilities that are not protected by collateral or a guarantee, meaning that the lender does not have rights to specific assets if the borrower defaults.

Bankruptcy Petition

A legal document filed by an individual or business entity declaring inability to pay outstanding debts, seeking relief through the judicial system.

Net Realizable Value

The estimated selling price of goods minus the costs of their sale or disposal, used to assess the value of inventory in accounting.

Unsecured Creditors

Creditors who have extended credit without any collateral. In the event of a borrower's bankruptcy, they stand behind secured creditors in the priority of claims.