When Does the Auditor Use Simple Random Sampling

question 62

Multiple Choice

When does the auditor use simple random sampling?

• A) when the auditor has a particular judgmental criteria that is used to select the sample
• B) where the auditor wants numbers in sequence and would like to select the sample rapidly
• C) for testing of cutoff after the year end with respect to accounts payable
• D) for populations where each item is considered to have the same characteristics for audit purposes

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Definitions:

Special Unit Price

A unique price offered for a product or service, typically different from the standard pricing.

Regular Sales Price

Regular sales price refers to the standard price set for a product or service before any discounts or promotions are applied.

Salvage Value

An estimate of an asset’s value at the end of its useful life.

Incremental Analysis

The process of identifying the financial data that change under alternative courses of action.