When the Auditor Decides to Select Less Than 100 Percent

question 79

Multiple Choice

When the auditor decides to select less than 100 percent of the population for testing, the auditor is said to use

• A) audit sampling.
• B) representative sampling.
• C) poor judgment.
• D) estimation sampling.

---

Definitions:

Payables Period

The average amount of time it takes for a business to pay off its owed liabilities to suppliers or creditors.

Cash Cycle

It describes the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Inventory Period

The amount of time it takes for a company to sell through its current stock of inventory.

Accounts Receivable Period

The average number of days that it takes a company to collect payments after a sale has been made, a critical component of managing cash flow.