In Statistical or Nonstatistical Sampling Methods Used in Substantive Testing

question 14

Multiple Choice

In statistical or nonstatistical sampling methods used in substantive testing, an auditor most likely would stratify a population into meaningful groups if:

• A)monetary-unit sampling (MUS)is used.
• B)classical variables sampling is used in order to focus on large items.
• C)the auditor's estimated tolerable misstatement is extremely small.
• D)the standard deviation of recorded amounts is relatively small.

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Definitions:

Self-Interest

An individual’s actions and decisions motivated by personal gain or benefit.

Public Interest

Denotes the well-being of the general public and the consideration of what is beneficial for society as a whole.

Economic Profits

Profits exceeding the opportunity costs of all inputs, indicating a return beyond the norm expected in the market or industry.

Industry

A sector of the economy characterized by a specific type of activity or product, such as manufacturing, technology, or services.