When Selecting Items for Testing, the Auditor Concentrates Their Selection

question 26

Multiple Choice

When selecting items for testing, the auditor concentrates their selection on high dollar value items. This approach is:

• A) never appropriate in performing audit procedures under Australian auditing standards.
• B) not an audit sampling technique but is often an appropriate evidence collection technique.
• C) appropriate only if the auditor is undertaking statistical sampling.
• D) generally a useful and efficient method for all audit tests.

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Definitions:

Tickets

A document or electronic card that gives the holder a right to admission, travel, or participation in an event.

Continuous Random Variable

A type of random variable that can take on an infinite number of values in a continuum.

Expected Cost

The forecasted average amount of money that would be spent on a particular event or activity.

Mean Cost

The average cost of producing one unit of a product or service, calculated by dividing the total cost by the number of units produced.