Auditors Who Prefer Statistical Sampling to Nonstatistical Sampling May Do

question 16

Multiple Choice

Auditors who prefer statistical sampling to nonstatistical sampling may do so because statistical sampling helps the auditor

• A) Measure the sufficiency of the evidential matter obtained.
• B) Eliminate subjectivity in the evaluation of sampling results.
• C) Reduce the level of tolerable misstatement to a relatively low amount.
• D) Minimize the failure to detect a material misstatement due to nonsampling risk.

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Definitions:

Operating Activities Section

Part of the cash flow statement that shows cash inflows and outflows related to the primary, day-to-day operations of the business.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.

Noncash Item

Transactions or items that appear on an income statement or in financial statements but do not affect cash flow, such as depreciation and amortization.

Financing Activities

Transactions related to raising capital and repaying investors, included within the cash flow statement.