Auditors Who Prefer Statistical Sampling to Nonstatistical Sampling May Do

question 22

Multiple Choice

Auditors who prefer statistical sampling to nonstatistical sampling may do so because statistical sampling helps the auditor:

• A)measure the sufficiency of the evidential matter obtained.
• B)eliminate the cost of training auditors in the proper use of sampling techniques.
• C)reduce the level of tolerable misstatement to a relatively low amount.
• D)minimize the failure to detect a material misstatement due to nonsampling risk.

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Definitions:

Factor Analysis

A statistical procedure that identifies clusters of related items (called factors) on a test; used to identify different dimensions of performance that underlie a person’s total score.

Algorithms

Step-by-step procedures or formulas for solving problems, often employed in the fields of mathematics and computer science.

Availability Heuristic

A cognitive shortcut that depends on the first examples that spring to mind when one assesses a particular topic, concept, strategy, or choice.

Framing Effect

The influence of context or the way information is presented on how it is perceived and interpreted.