When Determining the Sample Size for the Number of Items

question 110

Multiple Choice

When determining the sample size for the number of items the auditor should count during the physical inventory,

• A) it is easy to quantify the number of items based on a formula developed by the AICPA.
• B) one of the key determinants that must be considered is internal control over the physical count.
• C) one of the key determinants that must be considered is the cost involved.
• D) generally accepted auditing standards require that at least 80% of the dollar value of the inventory should be included in the sample.

---

Definitions:

Nitrogen

A diatomic gas that makes up about 78% of the Earth's atmosphere, essential for life as it is a major component of amino acids and nucleic acids.

Pressure

The force exerted per unit area upon a surface by the weight of the air above that surface in the atmosphere or by any gas in confined space.

Volume

A measurement of the amount of space an object or substance occupies.

Boyle's Law

A gas law stating that the pressure of a given mass of an ideal gas is inversely proportional to its volume at a constant temperature.