An Advantage of Using Statistical Over Non-Statistical Sampling Methods in Tests

question 33

Multiple Choice

An advantage of using statistical over non-statistical sampling methods in tests of controls is that the statistical methods:

• A) provide an objective basis for quantitatively evaluating sampling risk.
• B) afford greater assurance than a non-statistical sample of equal size.
• C) eliminate the need to use judgment in determining appropriate sample sizes.
• D) can more easily convert the sample into a dual-purpose test useful for substantive testing.

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Definitions:

Tax Revenue

The revenue that governments acquire by imposing taxes.

Output Efficiency

A state where resources are allocated in the most effective manner, producing the maximum amount of goods and services.

Willingness To Pay

The maximum amount an individual is prepared to spend on a good or service, reflecting their valuation of it.

Trade Agreement

A contractual arrangement between countries regarding their trade relationships and tariffs.