If the Size of the Sample to Be Used in a Particular

question 59

Multiple Choice

If the size of the sample to be used in a particular test of attributes has NOT been determined by using statistical concepts, but the sample has been chosen in accordance with random selection procedures:

• A) the auditor may or may not achieve the tolerable deviation rate at the acceptable risk of assessing control risk too low.
• B) the auditor will have to evaluate the results by reference to the principles of discovery sampling.
• C) no inferences can be drawn from the sample.
• D) the auditor has committed a non-sampling error.

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Definitions:

Stock Split

A corporate action where a company divides its existing shares into multiple shares to increase the number of shares outstanding.

Cash Dividend

A payment made out of a company's profits to its shareholders, as determined by the company's board of directors, usually provided in cash.

Regular Dividend

A dividend paid by a company to its shareholders at regular intervals, often quarterly, semi-annually, or annually.

Repurchase Stock

The act of a company buying back its own shares from the marketplace, which can affect shareholder value and earnings per share.