Auditors Have a Variety of Sampling Approaches Available

question 24

Multiple Choice

Auditors have a variety of sampling approaches available.For each approach in the first column,identify the correct statement in the second column.Each statement may be used once,more than once,or not at all.
-Probability-proportional-to-size sampling.

• A)A method that is most effective in circumstances in which auditors expect a very low rate of occurrence of some critical deviation (e.g. ,a fraudulent cash disbursement).
• B)A classical method that uses both the audited and book values of items in the sample to obtain an estimated total audited value.
• C)The most frequently used general method that arrives at an estimated deviation rate.
• D)A method that defines the sampling unit as each individual dollar.
• E)A classical variables sampling plan enabling the auditors to estimate the average dollar value (or other variable)of items in a population by determining the average value of items in a sample.

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Definitions:

Logical Information

Data or facts that are coherent and consistent, following a clear, reasoned pattern.

Two-Way Communication

A form of communication where information flows in both directions, allowing for feedback and interaction between parties.

Competitor's Products

Goods or services offered by rival companies within the same market.