Auditors Who Prefer Statistical to Nonstatistical Sampling Believe That the Principal

question 53

Multiple Choice

Auditors who prefer statistical to nonstatistical sampling believe that the principal advantage of statistical sampling flows from its ability to

• A) quantify sampling risk.
• B) promote a more legally defensible procedural approach.
• C) define the precision required to provide audit satisfaction.
• D) establish conclusive audit evidence with decreased audit effort.

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Definitions:

Cutting Pattern

A plan or diagram used to cut materials in a manner that minimizes waste while meeting production requirements, common in industries like manufacturing and textiles.

Net Present Value

A financial metric that calculates the present value of an investment's cash inflows and outflows over time to determine its profitability.

Budget

An estimate of income and expenditure for a set period of time, often used to plan and control finances within organizations or by individuals.

Orlando

A city in central Florida, known for its theme parks, including Walt Disney World and Universal Studios.