When Audit Procedures Have Been Completed for an Attributes Sampling

question 62

Multiple Choice

When audit procedures have been completed for an attributes sampling application, the auditor must generalize from the sample to the population.Which of the following statements would be incorrect regarding this process?

• A)The auditor would use an attributes sampling table to determine the computed upper exception rate.
• B)If the sample size is not equal to those provided for in the attributes sampling evaluation tables, the auditor cannot use attribute sampling.
• C)It would be wrong for the auditor to conclude that the population exception rate is exactly the same as the sample exception rate.
• D)In selecting the table corresponding to the ARO, it should be the same as the ARO used for determining the initial sample size.

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Definitions:

Effective Rate

The actual rate of interest earned or paid on an investment or loan over a specified timeframe, taking into account the effect of compounding.

Finance Company

A business that provides loans to individuals or corporations, apart from traditional banks, often focusing on areas such as auto financing, personal loans, and leasing.

Effective Rate

The actual interest rate on an investment or loan, taking into account the effects of compounding.

Insurance Settlement

The amount paid by an insurer to a policyholder or claimant as resolution for a filed claim.