In Which of the Following Situations Would the Use of Classical

question 48

Multiple Choice

In which of the following situations would the use of classical variables sampling (as opposed to monetary unit sampling) be most appropriate?

• A) When a larger number of misstatements are anticipated.
• B) When overstatement errors (as opposed to understatement errors) are of more importance.
• C) When individual components and account balances are higher in comparison to the tolerable misstatement established by the auditor.
• D) When the auditor wishes to begin sampling during the interim period.

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Definitions:

Unilateral Contract

A promise made by one party in exchange for the performance of an act by another party.

Bilateral Contract

A type of agreement in which both parties involved promise to perform certain actions or obligations.

Consideration

A legal concept referring to something of value exchanged between parties in a contract, making the agreement binding and enforceable.

Unforeseen Circumstances

Events that could not have been predicted or expected and may impact contractual agreements or obligations.