In Which of the Following Circumstances Would the Auditor Most

question 18

Multiple Choice

In which of the following circumstances would the auditor most likely use variables sampling?

• A)Identifying the susceptibility of the account balance to misstatement.
• B)Evaluating the operating effectiveness of specific control procedures.
• C)Evaluating the operating design of specific control procedures.
• D)Determining whether the client's accounts receivable balance is correctly recorded.

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Definitions:

Pension Benefit Guaranty Corporation

A U.S. government agency that protects the retirement incomes of American workers in private sector defined benefit pension plans.

Defined Benefit Pension Plans

Retirement plans promising a specific benefit at retirement, which is usually calculated through formulas involving salary and years of service.

Other Postretirement Benefits

Benefits, other than pensions, provided to employees after they retire, such as health insurance.

Accrual Basis

An accounting method that records income and expenses when they are earned or incurred, regardless of when cash transactions happen.