Audit Sampling Can Be Applied for Reviewing Sales Transactions for Large

question 117

True/False

Audit sampling can be applied for reviewing sales transactions for large and/or unusual amounts, and also for observing whether the duties and responsibilities of the receivables clerk are separate from the handling of cash (a test of control).

---

Definitions:

Agency Relationship

A legal arrangement where one party, the agent, is authorized to act on behalf of another, the principal, in business dealings or other matters.

Authorized Act

An action taken by an individual or entity that is legally permitted under the law or by a governing body.

Principal

In a legal context, the main party who authorizes another (the agent) to act on their behalf in transactions or other legal matters.

Agent

An individual or entity authorized to act on behalf of another (the principal) in dealings with third parties.