An Auditor Wishes to Estimate Inventory Shrinkage by Weighing a Sample

question 14

Multiple Choice

An auditor wishes to estimate inventory shrinkage by weighing a sample of inventory items.From experience,the auditor knows that a few specific items are subject to unusually large amounts of shrinkage.In using statistical sampling,the auditor's best course of action is to:

• A)Eliminate any of the items known to be subject to unusually large amounts of shrinkage.
• B)Increase the sample size to lessen the effect of the items subject to unusually large amounts of shrinkage.
• C)Stratify the inventory population so that items subject to unusually large amounts of shrinkage are reviewed separately.
• D)Continue to draw new samples until a sample is drawn which includes none of the items known to be subject to large amounts of shrinkage.

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Definitions:

Relaxation

The process of making or becoming less tense or anxious, often achieved through techniques such as meditation or deep-breathing exercises.

Intraosseous Infusion

A medical procedure that involves the injection of fluids, drugs, or blood products directly into the bone marrow to provide a non-vascular entry point when intravenous access is difficult.

Hypovolemic Shock

A condition characterized by a severe loss of blood or fluid, leading to inadequate blood flow to organs.

Dehydration

The condition resulting from the excessive loss of body water.