A Disadvantage of Using a Systematic Random Selection Procedure Is

question 117

Multiple Choice

A disadvantage of using a systematic random selection procedure is that

• A) This type of procedure does not permit the auditor to measure the exposure to sampling risk.
• B) This type of procedure does not make all items available for selection.
• C) This type of procedure requires that the population be arranged in a random order.
• D) This type of procedure provides the auditor a higher level of exposure to nonsampling risk compared to other selection procedures.

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Definitions:

Net Present Value

A method used to evaluate the profitability of an investment, calculating the difference between the present value of cash inflows and outflows.

Operating Cash Flows

The cash generated from the normal operations of a business, such as revenue from sales after operating expenses are deducted.

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be consumed or sold within a year.

Salvage Value

The projected remaining worth of an asset upon reaching the end of its serviceable life.