Alicia Wong, an Auditor, Is Planning Confirmation of Accounts Receivable

question 59

Multiple Choice

Alicia Wong, an auditor, is planning confirmation of accounts receivable. There are 500 customer balances and based on the condition of the accounting records and her past experience with the client, she plans to send 50 confirmation requests to customers she selected from the aged trial balance of accounts receivable. Alicia plans to evaluate confirmation responses qualitatively and by multiplying the average error in the 50 responses by 500. This audit approach may be described most precisely as:

• A) statistical sampling.
• B) exception reporting.
• C) non-statistical sampling.
• D) None of the given answers.

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Definitions:

Automatic Processing

refers to the unconscious encoding of incidental information, such as space, time, and frequency, and of well-learned information, such as word meanings.

Effortful Processing

A type of memory encoding that requires attention and conscious effort in order to encode information.

Two-Track Mind

The concept that the human mind operates both consciously and unconsciously at the same time.

Effortful Processing

A type of memory encoding that requires attention and conscious effort, as opposed to automatic processing.