If the Size of the Sample to Be Used in a Particular

question 56

Multiple Choice

If the size of the sample to be used in a particular test of controls has not been determined by utilizing statistical concepts, but the sample has been chosen in accordance with random selection procedures:

• A)no inferences can be drawn from the sample.
• B)the auditor has committed a nonsampling error.
• C)depending on the size of the sample chosen, the auditor may actually achieve desired precision.
• D)the auditor will have to evaluate the results by reference to the principles of discovery sampling.

---

Definitions:

Raw Materials

The basic materials and components required to start the production process.

Standard Cost Card

A detailed listing of the standard amounts of inputs and their costs that are required to produce a unit of a specific product.

Standard Cost System

An accounting system that uses cost estimates for materials, labor, and overhead to control costs and assess operational efficiency.

Fixed Manufacturing Overhead

Payments that remain unchanged no matter the volume of production or sales, including rents, staff remuneration, and insurance agreements.