When Making the Sampling Decisions for Accounts Receivable Confirmations

question 76

Multiple Choice

When making the sampling decisions for accounts receivable confirmations,

• A) it is important to sample some items for every material segment of the population.
• B) if management refuses to allow the auditor to send confirmation requests to certain customers, the auditor must withdraw from the engagement.
• C) inherent risk does not impact the sample size.
• D) stratification of the sample is discouraged under current auditing standards.

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Definitions:

Computers

Electronic devices that process, store, and output information, capable of executing complex algorithms and tasks.

Tested

The process of examining or evaluating something to determine its characteristics, quality, or performance.

Set Up

The process or action of making something operational or ready for use, especially in a context of preparation or installation.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs and production technology.