Which of the Following Set of Conditions Would Provide the Auditor

question 2

Multiple Choice

Which of the following set of conditions would provide the auditor with the smallest sample size under monetary unit sampling (RIA = risk of incorrect acceptance,EM = expected misstatement,TM = tolerable misstatement,PS = population size) ?

• A)RIA = 5 percent,EM = $7,500,TM = $15,000,PS = $150,000.
• B)RIA = 5 percent,EM = $5,000,TM = $10,000,PS = $200,000.
• C)RIA = 5 percent,EM = $2,000,TM = $10,000,PS = $100,000.
• D)RIA = 5 percent,EM = $7,500,TM = $15,000,PS = $300,000.

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Definitions:

Deductive

A logical process in which a conclusion follows necessarily from the stated premises; inference by reasoning from general to specific.

Experimental

Pertaining to a method of research in which variables are manipulated and the effects on other variables are observed; crucial in establishing causality in psychology and other sciences.

Syllogism

A form of logical reasoning where a conclusion is drawn from two given or assumed propositions (premises) with a common term.

Reasoning

The process of thinking about something in a logical way in order to form a conclusion or judgment.