An Auditor Using Nonstatistical Sampling Cannot Formally Measure Sampling Error

question 29

Multiple Choice

An auditor using nonstatistical sampling cannot formally measure sampling error and therefore must subjectively consider the possibility that the true population misstatement exceeds a tolerable amount.Which of the following factors should be considered by the auditor in making this assessment?

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Definitions:

Traditional Format Income Statement

A financial statement that shows a company's revenues, expenses, and profits, typically starting with sales and subtracting cost of goods sold and other expenses.

Merchandise Inventory

The total value of goods held by a company for the purpose of resale.

Selling Expenses

Expenses directly related to the sale of goods or services, like marketing expenses and wages for sales personnel.

Administrative Expenses

Costs related to the general administration of a business, such as salaries of senior executives, legal and accounting services.