Auditors Who Prefer Statistical to Nonstatistical Sampling Believe That the Principal

question 47

Multiple Choice

Auditors who prefer statistical to nonstatistical sampling believe that the principal advantage of statistical sampling flows from its unique ability to

• A) Define the precision required to provide audit satisfaction.
• B) Mathematically measure uncertainty.
• C) Establish conclusive audit evidence with decreased audit effort.
• D) Promote a more legally defensible procedural approach.

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Definitions:

Five-period Moving Average

A type of moving average that calculates the average of the most recent five periods or intervals, used in time series analysis to smooth data.

Time Periods

Segments or intervals into which time is divided for the purpose of analysis, observation, or measurement.

Smoothing Constant

A parameter used in exponential smoothing models to apply different weights to past observations, influencing how smooth the resulting time series will be.

Exponentially Smoothed

A technique used in time series analysis to smooth data points by assigning exponentially decreasing weights over time.