When Deciding the Acceptability of the Population

question 57

Multiple Choice

When deciding the acceptability of the population,

• A) the methodology for deciding the acceptability of the population for attributes differs from determining the acceptability for nonstatistical sampling.
• B) before the population can be considered acceptable, the CUER determined on the basis of the actual sample results must be less than or equal to TER when both are based on the same ARO.
• C) when the CUER is greater than the TER, the auditor must increase the sample size.
• D) the CUER is compared with the TER in total, not for each attribute.

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Definitions:

Isoquant

An isoquant is a curve that represents all the combinations of inputs that yield the same level of output in the production process.

Returns To Scale

Describes how output changes in response to a proportional change in all inputs in the production process.

Production Function

A production function describes the relationship between inputs used in production and the resulting output, showing how the quantity of output depends on the quantities of different inputs.

Input

Resources used in the production process, including labor, materials, and capital, to produce goods or services.