Which of the Following Is Not True with Respect to the Use

question 7

Multiple Choice

Which of the following is not true with respect to the use of monetary unit sampling (MUS) ?

• A)MUS selects individual dollars from an account balance for verification.
• B)Compared to classical variables sampling,MUS allows the auditors to more effectively control their exposure to sampling risk.
• C)MUS estimates the extent of misstatement in an account balance or class of transactions.
• D)MUS provides the auditor with a more conservative estimate of the misstatement than classical variables sampling.

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Definitions:

Draft

A written order drawn on one person by another, requesting him to pay money to a designated third person.

Demand

A claim; a legal obligation; a request to perform an alleged obligation; a written statement of a claim. In corporation law, a request that the board of directors sue a person who has harmed the corporation; a prerequisite to a shareholder derivative suit.

Commercial Paper

Negotiable paper such as promissory notes, drafts, and checks that provides for the payment of money and can readily be transferred to other parties.

Unconditional Order

A directive that must be followed without any stipulations or requirements.